Tuesday, May 1, 2012

Strangely muted

The market has shot through 4400 today, up 27 to 4423 at 12.24 pm. In my book of longs and shorts though, there's not a lot of action and the top 20 is outperforming. It's a shame I didn't decide to hold a few WPL longs overnight, the stock is up 148 at 3640 on corporate news.

I've just sold out of DJS for square at 250 and I'm covering some short TOL at 581 as the stock has slipped 5. Of the new longs, QAN and RSG have edged higher while MSB is down 5 but working its way back from a weak open after window dressing on yesterday's match. OST is the worst of the short positions, up 3.5 to 134 but it's still below my stop.

Here's a daily chart for the Asx 200. The index has traded at its highest level since early August and is closing in on resistance at 4445. It's a breakout of a very long range but with resistance so close, I'm fairly neutral on the prospects of strong breakout type gains.

chart

2.40 A surprise 50 basis point cut from the Reserve bank and the market has had another surge and sits up 1% at 4441. It's a very welcome move and quite a surprise from an organisation that had seemed to be increasingly cloth eared in recent years.

2.58 I was too hasty getting out of DJS but QAN is pushing on. I covered the last of the TOL at 581.

4.13 The market peeled back from resistance to finish up 33 at 4430. I ran through a bunch of charts and couldn't find much that was compelling that hadn't already run. I decided against cutting OST when it went through my stop at 136, 137 and that turned out to be a reasonable decision as it ebbed back to close at 134.5. When I'm trying to fade a top, there'll often be a minor new high and, if possible, I try to wait until the close before stopping out. In this case, it's another new high with no oomph to it and I'm willing to hold overnight.

chart

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