VOC chart, page-2

Today VOC was added to the portfolio at $3.27 (7.5 percent position size of total trading capital). Assuming a maximum one percent loss of total trading capital in a worse case scenario, VOC can fall as low as $12.83. In practice, providing there is no large sudden downside price gap, the 3 x ATR trailing stop loss is $2.98.

I usually only buy stocks approaching 6-month or 12-month new highs. These are either breakouts from recent sideways consolidation, or temporary pullbacks within the context of an existing longer-term uptrend. VOC is an exception to these usually more profitable trading strategies.

With VOC, the multi-month stage 4 downtrend started back in August, 2016 at circa $8.50 when price first traded below a 26-week EMA. Finally confirmation of the stage 4 downtrend was when price was below declining 130-day EMA and below declining 200-day EMA. Recently since July, 2018, VOC has traded sideways (stage 1 accumulation).

On August 27, 2018, Stockradar issued a note to clients to buy VOC at circa $2.80. This was an aggressive entry. As a subscriber I have the option of delaying the purchase until it trades at a higher price for additional confirmation that the downtrend breakout is sustainable.

As viewed on a monthly chart, VOC is now trading above a rising 10-month EMA. This is one chart signal for longer-term investors to buy. The risk is that there is massive overhead supply from traders trapped in losing positions who are keen to either reduce substantial losses, or at best, break even. The collective psychology of these traders potentially puts a lid on upward price action. But these type of value trades can sometimes provide in excess of over 100 percent capital gain. ASL (Ausdrill) is one example where price has made large gains after significant stage 4 declines.

Portfolio: ALU_ALX_APX_BAP_BPT_BVS_MNY_NEA_SIQ_VOC