Trading Diary
November 16, 2001
This is my daily stock trading diary.
It is intended to illustrate the techniques used in
short-term share trading and should not be interpreted
as investment advice. Full terms and conditions can be found
at
Terms of Use .
USA
The mid-week rally seems to have dissipated, with the
Dow, S&P500 and Nasdaq closing largely unchanged.
Australia (ASX)
The All Ords took a breather after a week of strong gains,
closing down at 3258 on strong volume. We may have another
test of the 21-day moving average in the week ahead, but the
trend still looks strong.
Just remember: The broader the base, the stronger the trend.
The trough in September had a very narrow base and we could
well experience a pull-back to near these levels.
Telstra
Healthcare & Biotechnology
Healthcare & Biotech are the top performing industry group
on the ASX, measured over 3 years. Heralded as the "technology
of the future", I have a lurking suspicion that Biotechs
could be more accurately described as the next "DotCom" sector.
There will be some spectacular successes but there will also be
some spectacular failures.
Longer-term, active investors should restrict
themselves to stocks with sound fundamentals:
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Look for positive earnings per share, stocks that are viable businesses and not just good "ideas";
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Avoid stocks that are overly reliant on a single product.
Conclusion
Short-term trades: There is a higher risk entering this late in
a trend. Use
trailing buy-stops to time entries
and ensure that stop
losses are placed within the 2% maximum
acceptable loss.
Long-term trades: Wait for a pull-back on the
secondary cycle.
Colin Twiggs
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