Winner of the Day from the Top 100 stocks was clearly Fortescue Metals, up 8.02% on good volume. Today's movement took the stock chart well clear of the long sideways consolidation in existence for the past three months. The big move today was due to favourable market reaction to the release by Fortescue of their quarterly production report.Could you have bought Fortescue before today's announcement and gained from today's big increase. The answer is "Yes" - but it would have been a brave trader to do so.
The signals were four days ago:
- A break above the Super Trend Line (the stepped line on the price chart).
- A break above Zero on the Smoothed Repulse line (first pane below the price chart).
- A break above the Zero line by the MACD Histogram.
Would I have taken these signals? Simply - No. I'd have waited for a break above the long term upper resistance line on the chart which marks the top of the consolidation area.
Entering today on a clear break above that line would, however, have been a no-brainer (if you were watching for it).
There's probably a couple of days more of solid up movement in this. But it means entering tomorrow and hoping this will carry through on the next day. Not for me.
The general market is still too high for me to be entering new trades at this time. Back in early December was my entry point. Not now. But then - I'm a risk averse old investor. Preservation of capital is a first priority for me. I'll leave it to the young guns to carry the risky trades.
Good luck
Red
No comments:
Post a Comment