Vector Vest June14 User Group


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Vector Vest June14 User Group

  1. 1. VectorVest User Group June 2014 Written and presented by David William Paul
  2. 2. Dow
  3. 3. Dow
  4. 4. Dow 1300 pt target from the ascending triangle
  5. 5. Euro$
  6. 6. $ CAD Daily falling wedge Always a good bet
  7. 7. Aussie H4
  8. 8. Gold
  9. 9. $ Rand More Rand weakness on the way
  10. 10. VV Composite SA
  11. 11. VV Composite SA
  12. 12. Telkom
  13. 13. My Swing Trading Method • The method has rules for • 1. what share • 2. Entry • 3. Exit • 4. Position sizing
  14. 14. Swing Trading • Stock selection • I only swing trade “Long” in shares that have good RV values above 1.25 and acceptable RS numbers • What's unacceptable to me may be fine for you. • I am travelling to much for lots of surprises and like RS numbers about 1.15 at the very minimum.
  15. 15. Swing Trading • The technical position of the overall market is vital • If the overall market is rising that’s the best and only time to be taking long position. • Clearly the opposite is true for shorts. • If the VV composite is above a 200 day moving average and VV has given a confirmed call then I want to be in long only trades. • Conservative I know but that’s MY plan
  16. 16. Swing Trading • The basis of my trade is the AB=CD pattern • I like to see a pullback to an old high that occurs ABOVE the 89 average. • Over the years I have noticed that pullbacks that extend well below the 89 turn too often into reversals. • The pullback should occur on falling volume. • That’s what happened in Telkom and its shown in the next slide.
  17. 17. Swing Trading
  18. 18. Swing Trading • The stochastic adds the last dimension to the trade entry. • The best entries occur when the stochastic is below 20. • The best entries occur when the stochastic is showing reverse divergence with the price. • That’s shown next and I will explain on the flip chart at the UG in detail. • Its visual and a real edge in markets.
  19. 19. Swing Trading
  20. 20. Swing Trading • I use the VV stop loss for my swing trades. • I could get closer to the market action but then the stop is in the TRAFFIC and its easy to die in a sea of stops. Calculate the number of shares to buy so as if the position fails you lose no more than 2% of your account. • My entry is confirmed by the first solid green bar at the level when the stoch is showing reverse divergence. • A knowledge of candle patterns will be useful here. There is plenty of free analysis all over the internet.
  21. 21. Swing Trading • The target is vital in short term timing especially if you are using leverage. • I split my position into three pieces. • Exit the first 1/3 when you have made as much as you have initially risked. This brings the total risk to initial risk on 1/3 of the position. (2/3 left but you have made 1/3) • Exit the 2nd 1/3 at the old high and get the stop to entry at this point. • Exit the last 1/3 at a 1.618 extension of the last pullback.
  22. 22. Swing Trading • If the fundamental position of the share is good. If the technical position of both the share and the general market are also good then I can predict the future with an accuracy that is uncommon in this line of work. • The trades don’t come along as frequently as I would like but I can have my cake and eat it. I have taken trades where all the conditions haven't been met and many have been fine. I will leave that to your own research. • The Telkom trade was broadcast last week in a webcast prior to the move
  23. 23. Capitec Long way to go
  24. 24. Omnia Going well
  25. 25. PSG Technically good VV says its overvalued
  26. 26. Brait
  27. 27. Invicta
  28. 28. Wescoal Be calm good things take time
  29. 29. Group 5 Just a matter of time
  30. 30. woolies
  31. 31. Woolies
  32. 32. TCP
  33. 33. TCP • Rv = 1.42 • Unvalued with our Value at 7.36 • Rs= 1 • It’s a strong contender for a large move assuming no systematic risk.