• Australian (ASX) Stock Market Forum

Hello and welcome to Aussie Stock Forums!

To gain full access you must register. Registration is free and takes only a few seconds to complete.

Already a member? Log in here.

Neilson Smart Money Analyser: POTENTIAL price action

Discussion in 'ASX Stock Chat' started by moses, Feb 17, 2007.

sentifi.com

Aussie Stock Forum Sentifi Top themes and market attention on:

  1. moses

    moses

    Posts:
    590
    Likes Received:
    0
    Joined:
    Apr 26, 2006
    This thread is intended to identify stocks with the potential to rise or fall purely on the basis of the Neilson Smart Money Analyser, available to subscribers of the Inside Trader ($550 pa), found here:-

    http://www.theinsidetrader.com.au.

    I'm creating a separate thread so that we don't have to debate whether or not a potential price movement satisfies the rules of a "breakout" thread. And by insisting on a standard indicator we can protect the thread from ramping.

    Caveat Lector! Reader beware!

    The charts are only an INDICATOR of POTENTIAL price direction. They are only useful in conjuction with your own other research.

    How does the analyser work?

    The indicators are based on an end of day scan taken from the depth queue after the market has closed each day. They compare the buying pressure of the shares (the supply demand indicator, blue line) to the pressure of the individual buyers (smart money indicator, black line) which we can see in the depth queue. Simply, when the black line increases, it means that the buyers (on average) are prepared to buy more shares than the sellers are prepared to sell. When the black line goes down, it means that the sellers (on average) want to sell more shares than people are prepared to buy.

    When the ratio is one, it means that the buyers and sellers are wanting to trade the same average size parcel.

    The "smart money" bit assumes that some of these high volume buyers or sellers know something you don't. If used in conjunction with your other research, this can be a useful clue as to the future price action - especially in the small to mid cap stocks. But used in isolation it can be misleading, and it does not work with big cap stocks.

    The above is a brief summary only. For more comprehensive information, including warnings, check out the tutorial (which may require purchase unless available for a free trial):-

    http://www.theinsidetrader.com.au/index.php?action=page&page=smartmoneytutorial.html


    My interest: I like to use the indicator before I make a decision to trade, especially when trading overnight. It helps me to time my trades and adds confidence to decisions. I don't use it alone. I have no interest or relationship with the Inside Trader, and start this thread from the point of view of making a potentially useful contribution to the ASF in return for the benefits the ASF gives me. I hope it encourages others to buy and use the analyser and contribute to this thread because there is NO WAY I can afford the time to do much more than post the occasional chart I find interesting. On that note I won't be acting as a de-facto Inside Trader Service by scanning every stock people want to see.

    Following this post will be some examples.
     
  2. moses

    moses

    Posts:
    590
    Likes Received:
    0
    Joined:
    Apr 26, 2006
    First example is BLR whose price fell 7% on Friday. On Thursday night I had run BLR through the SMA and decided to sell on open. I was right.

    Below is Friday's chart; it suggests that unless something changes over the weekend it isn't looking good for BLR on Monday.
     

    Attached Files:

  3. moses

    moses

    Posts:
    590
    Likes Received:
    0
    Joined:
    Apr 26, 2006
    The 2nd example is HLX. The HLX thread is very enthusiastic about HLX's potential for a rise in SP, and the smart money indicator strongly implies that we aren't alone.
     

    Attached Files:

  4. moses

    moses

    Posts:
    590
    Likes Received:
    0
    Joined:
    Apr 26, 2006
    OTOH, no sooner had I selected ELL for the stockpick comp than it suffered a reversal. Why? Fundamentally I haven't a clue, but there is no way I'm buying back into ELL while the SMA chart looks like this!
     

    Attached Files:

  5. moses

    moses

    Posts:
    590
    Likes Received:
    0
    Joined:
    Apr 26, 2006
    BYR is interesting because the SMA suggests that right now profit taking small time scumbag speculators like us are selling out, while underneath the action serious buyers are soaking the stock up.
     

    Attached Files:

  6. moses

    moses

    Posts:
    590
    Likes Received:
    0
    Joined:
    Apr 26, 2006
    One from history to illustrate the SMA at its best. Anyone running GSE through the SMA in November or December should have realised someone knew something good was going to happen. The buying pressure was strong and persistent until the rocket was launched. Two weeks ago they took their profits and ran...
     

    Attached Files:

  7. moses

    moses

    Posts:
    590
    Likes Received:
    0
    Joined:
    Apr 26, 2006
    Finally, at risk of ramping, a non-mining stock that is showing positive signals for a price rise in the near future.

    See the BLG thread and DYOR (assume I am biased because I own this stock), but were I picking a stock for 2007 it would be BLG because (a) it seems pretty unknown atm and (b) the potential of its technology is enormous.
     

    Attached Files:

  8. moses

    moses

    Posts:
    590
    Likes Received:
    0
    Joined:
    Apr 26, 2006
    One word of warning; always look at the actual volume (which unfortunately is NOT displayed on the SMA chart) before giving weight to information on the chart.
     
  9. hitmanlam

    hitmanlam

    Posts:
    120
    Likes Received:
    0
    Joined:
    Nov 15, 2006
    Thankyou moses for your insight. Glad to see someone is backing up their words with some TA.

    Great thread.
     
  10. nomore4s

    nomore4s Commonsense isn't that common

    Posts:
    3,562
    Likes Received:
    0
    Joined:
    Jan 11, 2007
    G'day Moses,

    This is very interesting. Would you be able to/like to post a chart with EKM (I don't hold) as I'm interested to see what the chart looks like before the recent break out and there seems to be speculation this stock has further to run.

    Thanks
     
  11. moses

    moses

    Posts:
    590
    Likes Received:
    0
    Joined:
    Apr 26, 2006
    thanks for pointing out EKM; if only I had seen it before. The pressure on the SP has been wholly positive for at least 4 months, both from volume per buyer v seller and the number of shares bid v offered. This is a strong signal for a rerating. So from my reading of the SMA alone it seems that EKA is *extremely bullish* for blue sky soon with the caveat that Friday's spike may fall back a little before this stock really takes off. Compare with earlier post on GSE to see what I mean.

    Note earlier comments emphasising need for other research.
     

    Attached Files:

  12. tech/a

    tech/a No Ordinary Duck

    Posts:
    18,959
    Likes Received:
    2,699
    Joined:
    Oct 14, 2004
    Not going to post all the charts but BLR was signalled for sale well before on VSA.
     

    Attached Files:

  13. Freeballinginawetsuit

    Freeballinginawetsuit

    Posts:
    987
    Likes Received:
    0
    Joined:
    Jul 25, 2006
    Hey Moses,

    Does your smart money indicator update overnight or tick intraday....in short how much does it lag.

    In your BLR chart it seemed to miss the last spike......despite the indicators down trend.....considering the rise of BLR wouldnt it just be indicating the bleeding obvious potential of profit takers.

    Cheers
     
  14. moses

    moses

    Posts:
    590
    Likes Received:
    0
    Joined:
    Apr 26, 2006
    The indicators are based on an end of day scan taken from the depth queue after the market has closed each day.
     
  15. YOUNG_TRADER

    YOUNG_TRADER

    Posts:
    4,199
    Likes Received:
    0
    Joined:
    Feb 18, 2006
    Moses,

    All I can say is reading your analysis on this thread makes me so glad I am a member of ASF, thank you so much, I have always said that my technical analysis is weak especially in comparison to my fundamental anlysis, this Smart Money stuff looks really crucial in having an overall or fully rounded view of a stock,

    Looks like I've got some reading up to do!

    Thanks again Moses :)
     
  16. moses

    moses

    Posts:
    590
    Likes Received:
    0
    Joined:
    Apr 26, 2006
    Coming from the most prolific and reliable source of fundamental tips on the ASF, I'll take that as high praise indeed. Not that I deserve the credit.

    What is powerful about the SMA is that it factors in the opinions of all the fundys, techs, and insiders together; all those investors who for whatever reason believe in a stock strongly enough to soak up on the dips (or conversly sell on the highs). And because it only looks at the end of day queue you could argue that it senses the mood of the calm deliberate investor who knows what he is doing and bides his time, waiting for the noise to come to him.

    I've been scanning through all the stocks from this month's comp looking for goodies. I'll post of few of the more significant signals up as the week goes by.
     
  17. moses

    moses

    Posts:
    590
    Likes Received:
    0
    Joined:
    Apr 26, 2006
    As an ethical investor I won't touch MST. However the SMA chart below is very bullish for MST.

    Note the black line is (a) positive, (b) increasing, and (c) stronger than the blue line.

    Then look at what happens when the blue line rises through the black line and work out for yourself what is likely to happen before too long.
     

    Attached Files:

  18. moses

    moses

    Posts:
    590
    Likes Received:
    0
    Joined:
    Apr 26, 2006
    DYL was the first stock I bought on the first day I was allowed to trade. Having decided Uranium was all the go, I chose DYL because I liked the name. Within 5 minutes I had made 20% profit; so I sold it. Easy! With such stunning success opening up my career as a born trader, naturally I doubled my stake and tried again. Oops. :banghead:

    So where is DYL heading today?

    Hmmm...not good. Rather bearish actually. The smart money is pulling out...
     

    Attached Files:

  19. moses

    moses

    Posts:
    590
    Likes Received:
    0
    Joined:
    Apr 26, 2006
    FWIW, AEX is almost a carbon copy of DYL.

    Maybe this isn't a reflection of the stocks themselves so much as market sentiment toward familiar uranium specs?
     

    Attached Files:

  20. moses

    moses

    Posts:
    590
    Likes Received:
    0
    Joined:
    Apr 26, 2006
    Does the EXT pattern look familiar?

    Could EXT be telling us where DYL and AEX are headed?

    I don't know, but I don't like the look of it. DYOR.
     

    Attached Files:

Loading...

Share This Page