Hi Windrider
I am an investor who uses experience , charts and numbers.
They are all useful to determine whether a stock is undervalued or overvalued. I buy, sell or wait accordingly.
All my recent posts about PLS use numbers from the quarterlies, chart comparisons with peers and then just my chart analysis.
Experience with charts has taught me that determining the top of a run is very very difficult. However one of the most valuable tools my charting experience has taught me is the use of the DCB. I free-carry many stocks by selling into the DCB. With re-buying I use other tools but mainly FIB extentions, although there are other signals including MACD and a few of my own making come into play.
Like the tops I never pick them (you have to let them run, but the DCB is the next best thing) same with the bottoms I never pick the absolute lows ( you have to let them run also).
I find that PLS is currently overvalued, because of my charts and the numbers. That's my opinion. Time to correction is impossible to predict and only fools attempt to set an accurate timeline.
I have a monthly chart of PLS below. Included in that chart is the $US shipped price achieved in the quarter in the PLS reports.
Notice the double top. The most likely cause of this was the expected second franked dividend ever paid. Everyone knew it was coming.
Since the second top the 12MMA has been falling,
There was a A-wave drop from the peak 5.41 to 3.10. Then inevitably came the B-wave DCB which was strong bouncing to the 61% FIB. I partially sold into this again twice. Why retain a portion? The possibility of a takeover cannot be discounted like LTR.
So that leaves us with the further C-wave downward extention. I have drawn in my 1st potential target zone for re-buying between the 23-50% downward FIB extentions. It could take many many months. I'll use the charts and the numbers from the coming Mar, Jun , Sep and Dec quarterlies to refine that target.
In that monthly chart there are a number of bearish signals.
* The DCB bouncing to 61% and seriously starting downwards. Not even a bounce soon to say the 4.20 will change that.
* The $US Spod prices roughly in size order rising then falling in a rough bell shaped configuration.
* The falling for 7 months of the 12MMA (1 year) from the peak.
* The negative MACD for 7 months (circled) with a very wide gap between negative and turning positive.
For me there is nothing bullish on that chart.
Nearing the end of my career, after living through so many boom/busts cycles on the markets, I thought that the entire markets were overvalued.
With my approaching retirement my super lump sum and retirement pension were linked to the markets. So very early 2008 I bailed into cash which was paying 4.5% at the time, for everything I held. I got confirmation of that decision with the MAY 2008 DCB and then the market turn fiercely downward for the rest of the year, thus avoiding the GFC. Easily the smartest investment decision of my life. Those DCB's are gold.
At least I put my projections out there for all to see. When I do so I have to put up with the inevitable series of people disputing the facts with a entire series of YEH-BUTS. Peers SP are tanking yeh-but, Income is falling dramatically yeh-but, year on year Spod prices are tanking yeh-but.
Just the way I deal with the market so that I am not surprised by what plays out. As always DYOR.
I'll leave the topic alone as I can't fight the yeh-buts.
Lets see what plays out in the coming months both in the charts and with the numbers in the quarterlies, with the first being this month.
Lies
(20min delay)
