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Long term trends in many ASX stock and sectors were broken with a distinct downturn in the period October to December 2018. There has been a general reversal of this trend in the period January to February. This pattern was reflected in many international stock markets, especially that in the USA. The impact of the Australia Financial Service Royal Commission, which recently reported was discussed. Internationally the trade war between the USA and China which is still on-going is considered to have a significant impact. The impact of these factors was considered. ASX stocks which may be considered to be still in a longer term trend were considered along with those showing a strong up-trend in the January February 2019 period.
Multiple Chart Indicators were discussed at the meeting with refeence to stocks trending at the November meeting. FOD (Foodland Revolution Group) provided an “interesting” stock for discussion, It also provided an example of the ASX 4.00 pm price auction. Screen captures of buyers and sellers from a 3.58 pm to 4.10 pm auction were captured and discussed.
Trend lines are among the most widely used means of analyzing price charts. The meeting discussed the construction and interpretation of trends lines as applied to WASINT momentum stocks on the ASX market. These interpretations were extend to stock that might be consider for buy, sell or hold decisions. Another application of trend lines which is less widely used is to calculate the annual rate of return over the period that a tend line can be established. This application contributes to information as to which stock to hold in a portfolio.
Trends in stock prices are normally followed from the closing price, normally on a daily or weekly price. Recently a study became available on the use of moving averages of high and low prices as a means of following trends and setting buy and sell points for stock transactions. This study reported a increase in returns compared to alternate means for setting buy sell points. These moving averages may be utilized with almost all charting packages and the means for doing this were discussed. Back testing results were reported for this financial year using criteria developed at WASINT meetings.
Financial reports contain much “chatter” on the impact on increasing US bond yields on price trends in international share markets. These trends were discussed from reports by prominent Australian financial practitioners in relation to issues which might be considered.
Following the review of Financial Year (FY) 2017-2018 results at the August meeting, a number of funds reported higher double digit returns. Back testing of stocks over the financial year was able to better these results. These back testing are being extended in the ongoing FY18/19 and compared to the previous FY.
The noteworthy outcomes from the August Reporting Season were discussed. Attention was focused on those stocks that had substantial rises or falls on the day of a report. Was there an indication of reporting day outcome in the price graphs? What action might be considered for following the report.
August is the main reporting month in the first half of the financial year. Company reports can lead to significant jumps of falls in a share price as seen by ASX shares MFG and ECX. These variation were considered in relation to subsequent price fluctuations as to possible action that may be considered.
A number of ASX share funds have reported double digit per cent returns for the financial year. Some of these were discussed. Buy and sell parameters as previous discussed were applied with back testing over the previous financial year. The results confirmed that returns in the mid double digit per cent range were achievable with a disciplined approach over the financial 2017-2018.
Many consider stock sell parameters to be more important than those for buying stocks. This meeting considered parameters for selling stocks that match the buying parameters discussed at the June meeting. The focus was on the more simple parameters such as ratios for trailing stops using fixed and variable ratios and the average true range. Such parameters enable them to be tested both in a manual environment and with computer back testing programs over various time ranges. Visually inspection of the parameters on price charts is a means to consider the likely effect.
Many stock selection parameters are available in considering stocks that you may wish to wish to buy. Which ones you use depends on those parameters that are available to you that have previously produced a favourable outcome. From all online and desktop program sources are great many parameters are available. This meeting focused on the use of StockDoctor and VectorVest in the choice and use of stock selection parameters. With input from members in attendance, the parameters were varied dynamically and the difference in the stock selected will be discussed. Other online and desktop stock selection procedures were briefly considered.
From the perspective of the Australian ASX All Ordinaries Index (XAO), 2018 has seen January being relatively flat with a steep dip at the beginning of February following by significant recovery by the end of February. The dip in the market was repeated for most of March, with April into May being a recovery to that just below that at the start of 2018. However, the XAO is an average and very many ASX stocks are now at an all time high. The stocks at all time highs as identified by performance tables available to WASINT members formed part of the discussion. The performance of these stocks wascompared with the performance of ASX Listed Investment Companies and ASX listed Exchange Traded Funds in the consideration of investment strategies.
International events are causing a great deal of volatility on International markets and the Australia ASX. In this volatility, those stocks and sectors showing periodic peaks and troughs wre discussed. Four, seven, thirteen, twenty six and fifty two week peaks and troughs were used as the periods for the discussions. Interactive spreadsheet tables were available for WASINT members for their explorations.
The overall consensus of the ASX reporting season February 2018 for the ASX was that earning were up by a small amount. A significant number of stocks had price gains or losses of 5 - 50% per cent on the day of the report. A selection of these were discussed to consider if the variation can be anticipated and more importantly, action that might be considered following the price variation. A small amount of hindsight is now available following the reports. What action might be considered prior the August 2018 ASX reporting season?
With recent volatility in international share markets, the first meeting for 2018 looked at the wider picture to see how recent volatility relates to previous events of a similar nature from charts and commentaries. The discussion was extended to differences in international countries and Australian sectors.
The meeting also include an in-depth discussion of features of the Webull stock analysis package, which is available on almost all computer platforms.