MLS (ASX) MLS Weekly Report

Weekly Review Li Stocks - 21st Oct 2022

Here is the weekly review figures and charts that I do every week. It is useful only for those interested in trading or those who hold multiple shares and based on performance would like to keep re-balancing as we go. I do hold a number of Li stocks and like to trade. This is the reason I include a number of Li Stocks in my analysis.

Please note:
This is no reflection of all AU Li stocks as I have only included those that I am interested. In my list are shares that I hold, held before or planning to buy in near future. Since this is my list, I may have missed some good stocks. The averages are simple averages and not weighted averages. So the average don't reflect AU Li average. This is just for my tracking and analysis. I have both ASX and US stocks in two separate figures.
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Please note that all my analysis are from a trading perspective looking at short-term view.
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NO DIARY THIS WEEK: This week there is no diary. Markets are very volatile and I am changing my position on a daily basis. I will return to diary once things stabilise - hopefully soon.
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I have a new section on Stock Specific action for the thread I am posting which I feel may happen next week - my expectations, predictions, (with lot of hope in it though).
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Friday's Action:
On Friday US Futures were down till half an hour back
Then we got a report from Wall Street Journal, which in tone tried to say Fed might pivot
US futures turned to green and eventually indices rose between 2.5 to 3% - very impressive
We also got Bank of Japan dumping dollar, hence weakening dollar, which was good for stocks - but this was later
There has been a lot of speculation around the timing of Wall Street Report. It made a huge change - was it deliberate?
Options (Puts and Calls) are made by individuals and Funds. There was over a trillion dollar on stake on Option Expiry on Friday. People who run the wall Street, lets call them Market Movers, have to pay out all these calls and puts. Think of it like Casino has to pay out all the wins.
If on Friday, Indices had declined, which it was looking like half-an-hour before open, these Market Movers who operate Wall Street business would have to pay huge money out for all the puts
On Thursday I had heard at least 3 analysts speak that there is a possibility that we could do higher on Friday? Why? Because of Options Expiry.
The analysis said that the Market Movers will make most money if SP 500 could close at around 3750 - based on Calls and Puts level.
Well, where did we finish on Friday? at 3752. Coincidence?
On Friday I had written Options Expiry is a very manipulated event
But all this doesn't say anything was manipulated - there is possibility, but ..
Another thing to note is that Wall Street news cannot be disputed by any Fed Speaker in near term. Although we have lot of Fed speakers in last few weeks, nearly every day, but from now on, next speaker will be Powell on Nov 3rd I think to talk about next rate rise. So that news can stand for now, undisputed. till Powell speaks
But for now, most charts have turned bullish. We are not Market Makers, we follow. And the signal now is bullish, and we can follow that if we want
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.Risk-Reward from here:
I have been following the price action very closely, in my figures, rise from June bottom etc.
After Friday's action I feel we have got final confirmation that Risk-Reward from here is very good
There is a chance we can have another sell down next week on indices - we could reach lower low (below 3491 on SP 500) or higher low.
At this stage, punters, markets have factored in all bad news, most feel we are near bottom, if not we have seen bottom.
If indices were fall, even big, stocks that I follow would drop another 10 to 20% - most likely another 10%.
But if what I am reading and seeing in price action is that we are near bottom or seen bottom, and its time to rally, we are looking at gains between 40% to 100% in next few months - individual stocks will carve their own path though where they fall
So at this stage of market - Risk-Reward is very good, one of the best I can think for a while
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Next week SP 500 path:
We don't have Powell speaking and getting next Rate rise decision for next 7 trading days
There will be earnings report and some economic numbers (jobs, consumer expenditure, etc) which may make some impacts
There is a good chance after Friday's rally that we may see some test on the upside. What are those levels:
First level is 3800. This is very crucial to get over it. It has been our recent high and for a bull run we need to get over this.
Next is 3900/3915 - a big number when we were coming down, Also represent 50 day moving average - so can lot of action there
Next is 4100/415 - this is final confirmation of bull run. Also is a number at 200 day moving average. If we can overcome this, the sky is blue. But there will be a lot of fight here - it won't be easy, it was not easy before when we retreated from this level and a strong resistance zone. Good thing? If we reach 4100/4125 - we are already 10% on indices, there is a good chance stocks would be up be by average 30% - we can decide then
There is a good chance that there may be a sell-off next week on some day- 3600 is final number to hold, more like 3660 - a spot for bargain hunters to load
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Personally:
As I have outlined above, I feel this is good time to take risk
I have decided to take a punt on the long.
Currently I have 50% of my portfolio as long and 50% I trade. Earlier in the year I used to be 65% long and 35% trade. I am going back to that. I feel its time to add more to long positions based on risk reward
Next week we may see fluctuations based on earnings report, but I will wait for Powell to speak before I change my tact, which is after 1 week.
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Stock specific Info:
MLS has done well to hold 4c zone.
Next week if markets improve, then I have a good feeling we will be high high 4s if not 5
I still hold long shares, my average is around 5,3 - so I am down. I sold my trading stocks just when it was falling around 5s.
I intend to buy this this week, though Alex Biggs is still silent, market is going to move - I want to buy, early 4s I will be happy to hold
If markets behave, we will have a 5 in front of us shortly
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Here is the Figures for the Week:
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Figures for US Li stocks:
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...Rise from June Bottom:
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