end of financial year today and a good time to review what has worked and what hasn't for the year
I was pondering the success of WAF and SLR which both doubled easily from sub 80c to $1.50 in a short time with golds recent run I liked the fa on both and bought the break on both
which of course cant help but notice the 100% rule. the 100% rule is a fundamental truth of trading on the asx for the pm plays. when they run they really run. it is fade 90% of the time but 100% is there for the taking in a very short time It is amazing how many times profit is taken at the 100% gain mark the key for me is trading the hammers tied with volume
you can apply the 100% rule across the board and not just to goldies
i called jbh when $36 held and then $40 was a real trigger and now at $64. another 100% in a blue chip consumer stock. safe as.
then we have wds. same story $16 held then $20 then it sat at $24 for a long time and then it ran and ran to $40. another 100%
if you drill down there have been decent moves available in the specs as well RSG doubled. 31c low on 18.8.23 to 59c on 7.6.24 IVR 3c in dec 24 to 7c in may 24 BC8 from 18c on 16.10.23 to 36.5c on 26.5.24
the key with those is buying on the hammer and then waiting for a change in the macros or some news flow and have the discipline to sell the blessed things and move on
the midcaps have not doubled so easily. they seem to take longer for each move but i also feel safer investing in ones actually producing and earning cash and even growing to pay divvies which i suspect is the real journey for stocks PRU $1.50 on 6.10.23 to $2.51 on 7.6.24
NST $9.90 on 3.10.23 to $16.04 on 19.4.24
ADT $2.80 on 14.12.23 to $4.89 on 20.5.24 not quite 100% gains but these midcaps take longer to play out and are mid journey anyway. pru was $1.20 not so long ago. nst $6. adt at 80c and $1.50 were both buy points
you can also learn a lot by comparing dates of lows and highs in each year
buying in the october lows and selling the april/may highs is a fairly safe approach on average most years it works
what hasnt worked? being impatient and panicking. how many times have stops been triggered on a short term hammer just to see the blessed thing double from there. a painful lesson not learning from mistakes not looking at long term charts losing patience for example those who sold woodside at $24 when it was stuck there for a long time and other stuff was moving jumping from trade to trade being impatient and buying highs selling for a small profit just when something is starting to move and when the longer term chart says more on the table
not recognising the opportunities is a big lesson i learnt years ago. i ran a list of commodities years ago. commodities which had not moved for years. gold silver uranium copper etc etc and then picked the best stocks on fa in each they have all run over the years my mistake has been those stocks where i did not follow my plan and sold too early or did not buy or told myself i would sell and rebuy lithium will turn up but still holding off for now
there is a cycle with the shorts lithium is currently a heavy short. do i buy here? no at some point demand will outmatch supply and those shorts in lithium will be covered and we will see a burst of green similar to the recent burst up in copper. do i buy here? no unless i buy just before they cover their shorts when the shorts and covers are sorted out and it fades back to support do i buy here? well maybe. it is a pivot point and a fair chance of reasonable growth for a period of time as it runs back to its recent high and the stocks have a chance to move up to paying divvies again copper is potentially at this point in the cycle. a recent burst of green and now in fade. $4.50 did not hold. $4.20 should see a reaction. starting to see some buying come in here. early days still
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