Measuring the Incalculable; Valuing the Intangible!: Current Holdings and Recent Trades

I thought I’d take the time to have a look at my current trades, and my rationale for the next little while.

Currently my open trades are shorts on AMP and QGC, with longs on IPL, NXS and ORI. I have quite a few other holdings, but I don’t consider them open because they are free carried. I also sold out of Potash on Thursday night, which was a small gain in USD, but probably a loss with currency conversion.

It’s the two shorts that I’m mostly interested in. I entered the short on AMP in early February and QGC on Friday.

AMP

Although technically, I think AMP has quite a way to fall, as with most if not all of the financials, I’m looking at some kind of bounce soon. It is on horizontal support, although that is not hugely strong, and on a 50% Fibonacci retracement line from the lows of 2003.

It also gapped down onto support, which leaves open the possibility of a blow off bottom, or an island reversal, and a hard counter trend rally. However, as you can see from the charts, it is quite a way from anywhere you could have trailing stops. There also appears to be little stopping volume on this last lunge down, which indicates a lack of interest.

So my bias for this is a rally in the very short term, with a continuation through support eventually. If it gaps up above the highs from Friday, I will look to get out. If not, I will continue to hold.

QGC

Purely playing this as a gap fill. I’ve traded QGC many times, and like it quite a bit. However, that gap stands out like a beacon. With a lot of nervousness, and energy possibly coming off a tad, I’d say all the potential is to the downside.

It has had very little volume since that initial gap, apart from top selling. And in the sideways move, volume has increased, which indicates distribution. The news that they are downgrading sales was not well received, and probably in this market will continue not to be in the short term.

The break of the 20 day low was a clear sell signal for me, as is the lowest close since the large gap. However, a stop out here would mandate a long. A chance for a rebound off the 38% retrace as well.

Target is between the fib retracement at $3.30 and the pennant target at around $3.

IPL, NXS and ORI are not in any huge danger, so there is no need to comment on them for the moment. But, as with all things at the moment, it can change very quickly.

Cheers.

Posted by Glen at 8:55 PM