Australian (ASX) Stock Market Forum

Pixel's Picks - potential trend reversals off the bottom

pixel

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I routinely run a special scan across the entire ASX, trying to pick up just this kind of stocks that look like having found a bottom and about to reverse back up.
As I can't trade everything, there are times when many really promising results of these market analysis runs "go to waste". So, here is the deal:
I'll post the results in bulk in this thread; if time permits, i may add a chart or two with my interpretation and ideas of what I might or might not do. If members want to add their own ideas, the more, the merrier. Stock-specific discussion may be best transferred to the individual stock's thread: Search for the code and open the pertinent topic. In here, I am happy to explain the selection criteria, which some members may know already by the name of "Trinity". I maintain a website, where the basics are explained, in case someone is really eager, visit my website http://rettmer.com.au/ and use the left-most green entrance. Here is the essence in a nutshell:

In my market analysis, I look for stocks that have fallen a fair bit, giving me some reasonable targets to aim for. Momentum must be turning up on average volume or better. And the price must definitely have left the "Volatility Envelope" on the upside. The V.E. is a band either side of the price at a distance that is determined by the rate of risk I intend to accept. In my routine run, I accept a move of 1.5 average days' volatility going against me.

These are simply the parameters that I'm looking for. The algorithms and scripts are my IP.

On charts, I use the same algorithm to draw a "Volatility Envelope", accentuated by several markers. The important ones are two kinds of arrows on or near the daily candles; these suggest Buy and Sell levels, usually when a candle leaves the relevant extreme of the Volatility Envelope. Orange "Ft" markets at the top show the origin of a new Primary Resistance, marked as a horizontal orange line at the resistance price level. And then there is a green triangle which will show below the candle on a day where Trinity believes a turn of trend might be in progress.

tonight, I only start with a snapshot of today's four results. I have, however, posted a couple of charts in their respective threads. I'll also post a chart of one of yesterday's results, AFI, where it belongs.

Pixel'sPicks.png
 

Porper

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I routinely run a special scan across the entire ASX, trying to pick up just this kind of stocks that look like having found a bottom and about to reverse back up.
As I can't trade everything, there are times when many really promising results of these market analysis runs "go to waste". So, here is the deal:
I'll post the results in bulk in this thread; if time permits, i may add a chart or two with my interpretation and ideas of what I might or might not do. If members want to add their own ideas, the more, the merrier. Stock-specific discussion may be best transferred to the individual stock's thread: Search for the code and open the pertinent topic. In here, I am happy to explain the selection criteria, which some members may know already by the name of "Trinity". I maintain a website, where the basics are explained, in case someone is really eager, visit my website http://rettmer.com.au/ and use the left-most green entrance. Here is the essence in a nutshell:

In my market analysis, I look for stocks that have fallen a fair bit, giving me some reasonable targets to aim for. Momentum must be turning up on average volume or better. And the price must definitely have left the "Volatility Envelope" on the upside. The V.E. is a band either side of the price at a distance that is determined by the rate of risk I intend to accept. In my routine run, I accept a move of 1.5 average days' volatility going against me.

These are simply the parameters that I'm looking for. The algorithms and scripts are my IP.

On charts, I use the same algorithm to draw a "Volatility Envelope", accentuated by several markers. The important ones are two kinds of arrows on or near the daily candles; these suggest Buy and Sell levels, usually when a candle leaves the relevant extreme of the Volatility Envelope. Orange "Ft" markets at the top show the origin of a new Primary Resistance, marked as a horizontal orange line at the resistance price level. And then there is a green triangle which will show below the candle on a day where Trinity believes a turn of trend might be in progress.

tonight, I only start with a snapshot of today's four results. I have, however, posted a couple of charts in their respective threads. I'll also post a chart of one of yesterday's results, AFI, where it belongs.

View attachment 59981

Watching with interest...good idea and looking forward to seeing your methods.
 
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Is this the only method you use to make picks?

Or just for new opportunities of growth?

Also is that little scan tool available for free? :p

Cheers Pixel
 
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You're a good man for sharing this Pixel - many thanks.

It's this sort of thing that prompted me to start the thread in the Beginner's Lounge.

:)
 

pixel

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Is this the only method you use to make picks?

Or just for new opportunities of growth?

Also is that little scan tool available for free? :p

Cheers Pixel

It's my main tool, but not the only one.
At times, it won't come up with anything; or it will throw up plenty of suggestions, far too many to keep an eye on, let alone enter into as a sole trader. In that case, I collect the results in a watchlist like the one below. That's the crop of only Monday to Wednesday this week.

WatchlistOct22-24.png

I'll post the results free of charge; free of obligation; free to use, reject, or criticize; the script itself runs under the Market Analyser 7 by MDS Financial, an add-on to webIRESS. They attract subscription fees.
 
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It's my main tool, but not the only one.


I'll post the results free of charge; free of obligation; free to use, reject, or criticize; the script itself runs under the Market Analyser 7 by MDS Financial, an add-on to webIRESS. They attract subscription fees.

At the risk of going slightly off-topic here, Pixel - do you prefer webIress to Pulse for this type of trading?
 

pixel

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At the risk of going slightly off-topic here, Pixel - do you prefer webIress to Pulse for this type of trading?

No.
For T/A, I have been using the Market Analyser for more than 15 years; IMO nothing comes close.
For online trading, I initially chose AOT Online as my broker because they used Iress. ... and then I discovered Pulse, which - again IMO - runs rings around Iress. Not to mention the difference between Commsec (who took over AOT) and PariTrade or Open Markets as it is now.

So it's horses for courses: taking advantage of each system's strength while compensating for the other's areas of weakness. In a pinch, should either suffer a hiccup, I can still use the other as a stop-gap.
 

pixel

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Today's results, to watch on Monday

scanLS 24-10-14.png

I like WBB because of the successful precedent in July:

WBB 24-10-14.gif

Brickworks may need a little more work before I build a position.
But Henderson could break resistance, i.e. today's High. Momentum looks definitely Bullish.

HGG 24-10-14.gif

MLD is still very risky, but, if successful, will also offer high reward:

MLD 24-10-14.gif

The others will sit in my watchlist with alerts set for breakout and retracements.
 

Wysiwyg

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MLD is still very risky, but, if successful, will also offer high reward:
I spotted that percentage change up too. Looking back they do have some pointy tops and bottoms so this could be a pivot point. Special dividends going ballistic this year is very unusual and share price must be adjusting downwards accordingly? I don't like their exposure to gold mines with gold price in a down trend but iron ore mine services (Atlas, Karara, Arrium) I would think will hold out for the longer term.
 

pixel

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Lunchtime Scan results:
AHZ
JBH
MYR

AHZ may need some work to break 14c resistance; the sector also carries greater risk, so I'll wait.

AHZ n 29-10-14.gif

JBH broke out early when I wasn't looking; seems I left it a bit late.

JBH n 29-10-14.gif

==> make mine Myer (see MYR topic)
 

pixel

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bought more MYR today; average cost base now close to $1.90.

Today's scan results:
CSV

CSV 30-10-14.gif

EPW

EPW 30-10-14.gif

NWS
SXL
TOF (no charts)
 

pixel

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Today's results:

Picks 331-10-14.png

I bought some MNW's - possibly too early; time will tell
 

pixel

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Even on a day as glum as today: one promising riser.

XRO n 06-11-14.gif

Breakout level $15.52; if it closes below $15, the deal is off.
 
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It's a very interesting approach, looks like it has a high success rate. Do you usually let the stocks run after a breakout? or do you have a sell price as well?
 

pixel

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It's a very interesting approach, looks like it has a high success rate. Do you usually let the stocks run after a breakout? or do you have a sell price as well?

Once the Primary resistance has been established, meaning the stock has pulled back and reversed up, I measure the distance between first Higher Low and Primary Resistance (High) and extrapolate Fibonacci extensions. They give me some potential targets. XRO has yet to show a PR, but MYR is a few days advanced, making the process easier to explain:

MYR o 10-11-14.gif

Primary Resistance was established on 3/11 at $1.935; retraced back to Fib 61.8%, the shadow on 6/11 has even touched 50%. So, now I look at potential upside at Fib 161.8% or 200%; the lower level turns out looking more likely because $2.06 has already been resistance on 19/09.
Please note: At this stage, I use the Fib levels only for position sizing, calculating potential reward when I buy the next break of Primary Resistance.

Once I'm in, I let the Market tell me when to exit the trade. For that, I use a trailing stop - usually on a "Close Below" basis - that is calculated daily from volatility and risk of increasing downside. In some instances, I may exit early based on candle and general chart patterns.

PS: I had bought MYR early, in case the first leg would extend into the lower gap; once that assumption proved incorrect, I exited with a small profit and am now waiting for $1.94 to guarantee a Higher High, following the Higher Low on 6/11. Basically you might say I use the HL-HH sequence as main criteria for a turn of trend.
 

pixel

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So much for that idea ...

MYR pm 12-11-14.gif

Wherever support will be found, it's not going to establish a Higher Low.
Consequently, MYR gets booted off the watchlist, only to return if a new signal emerges.

This example demonstrates the importance of working to a consistent Plan: It's okay to trade the first impulsive leg, as long as a tight stop is used to exit at the first sign of a pullback. Then we MUST wait patiently for the Primary Resistance to be broken - and stay away if that break does not happen.
 

skc

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So much for that idea ...

Wherever support will be found, it's not going to establish a Higher Low.
Consequently, MYR gets booted off the watchlist, only to return if a new signal emerges.

This example demonstrates the importance of working to a consistent Plan: It's okay to trade the first impulsive leg, as long as a tight stop is used to exit at the first sign of a pullback. Then we MUST wait patiently for the Primary Resistance to be broken - and stay away if that break does not happen.

OR... know the stock better and don't hold in a scheduled event (like quarterly sales update) unless that is part of the plan.
 

pixel

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OR... know the stock better and don't hold in a scheduled event (like quarterly sales update) unless that is part of the plan.
That's a valid point and applies regardless of the method you use to pick entries and exits.
However, unless you know which way the announcement will swing - iow have some inside info or the uncanny ability to "guess correctly" - not owning into a scheduled event is a double-edged sword: Had the sales result been better, or had the Market expected them to be worse than they turned out to be, we might have cursed our caution - or scrambled to get on board.

It does make trading easier if you know as much as possible about individual stocks. That's why I keep track of dividends, outstanding options, spud dates in case of oilers, etc. The charts and market scans can't tell such events. However, the charts will, to some extent, indicate Market expectation in the lead-up. And very often, we observe increased volume in the lead-up to a scheduled event, which suggests some people may have "guessed correctly" and got set a few days before an announcement.
 

skc

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That's a valid point and applies regardless of the method you use to pick entries and exits.
However, unless you know which way the announcement will swing - iow have some inside info or the uncanny ability to "guess correctly" - not owning into a scheduled event is a double-edged sword: Had the sales result been better, or had the Market expected them to be worse than they turned out to be, we might have cursed our caution - or scrambled to get on board.

I wouldn't curse my caution at all. If the trader had plan to hold through the event, he/she would have assessed the potential consequence (e.g. 15% adverse gap), and size the position accordingly. If the trader hadn't plan to hold through the event, and only find out that it is due to happen soon, he/she should ALWAYS exercise caution. That might be to scratch the trade, or reduce the size. That is the sensible action and enhances one's chance of surviving the market over the long term.

It really doesn't matter which way the event turns out. Wearing a seat belt is always wise, regardless of whether you have a crash or not.
 

pixel

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EHL, bucked yesterday's Market trend and continues today.

EHL n 18-11-14.gif

I'll also keep an eye on IGO, OGC, PRU
 
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