FYI--------------------------BUSINESSDAY TRADERDARRYL MORLEY597...

FYI

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BUSINESS
DAY TRADER
DARRYL MORLEY
597 words
4 March 2009
Herald-Sun
1 - FIRST
46
English
Copyright 2009 News Ltd. All Rights Reserved

THE All Ords had its lowest weekly close since last November on Friday. However, the S&P/ASX 200 and the SPI Futures contract did not close the week below the close on January 23.

We will see what will be this week, but it looks like they may close lower, putting all the indices back in unison.

There is still no reason for me to risk putting my money into the market. The break of the 3200 level on the All Ords still looks imminent.

Still, there are some stocks showing strength which have had considerable gains for those brave enough to risk buying in an established bear market.

The three stocks I mentioned monitoring in previous weeks have all behaved much as I expected. Resmed (RMD) moved back to test $6 and this week should see if it finds support there or if this is the start of a more serious decline.

Andean Resources (AND) tested $1.60 as expected, and last week pulled back on reducing volume to test $1.40. It looks as though it may still have some life left in it, which could see it move to its next target about $2.

Bow Energy (BOW) reversed the move down last week and began moving up again. If it moves above 55 it will very likely break above its record high and go to about 75 before finding its next resistance level.

As promised, I will list some stocks on my watch list as stocks of interest for when the market turns positive.

I must stress that I have not and have no immediate intention of buying any of these stocks. I am pointing them out because they are forming patterns that could develop as time progresses.

They are stocks with reasonable volume and this week I will mention some in the resource sector. Most are gold stocks. Some have moved up over the past couple of months and may well be set up nicely and give buy signals when the market does turn.

Dominion Mining (DOM) and Lihir Gold (LGL) are two higher-priced gold stocks that have retraced much of their 2008 losses and are currently trading just below the spike highs formed as they retested their record highs made late in 2007.

Newcrest Mining (NCM) tested this same retest level a couple of weeks ago and has since pulled back about 20 per cent, so it is important to wait for the buy signals to form where the risk-reward ratio is within acceptable parameters.

All three stocks should prove to be profitable trades if they break to new highs or consolidate about current levels.

Bendigo Mining (BDG) has been a bottom dweller for more than two years. It was forming a classic pattern until the middle of last year when it dropped from 30 to about 10 in a matter of months. However, it has since recovered to 20, so may provide some opportunities in the next few months.

St Barbara (SBM), A1 Minerals (AAM) and Norton Gold Fields (NGF) are three cheapies I'm keeping an eye on.

To learn how to find stocks that are ready to move up, book for a March/April seminar/workshop at www.thedaytrader.com.au

Cash: $197,631

Shares: Nil

Total: $197,631

(Initial stake in July 2006 of $50,000.)

Email: [email protected] investors should seek professional advice before buying shares to determine whether such action is appropriate for their investment objectives and financial situation.

DHS-20090304-1-046-084887

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