Aitken Spence Plc - SPEN.N.0000......Expected Target 57.70!!!

SPEN.N.0000 makes a potential counter which will have a short to medium term rally from now onward. Strong volumes can be seen changing hands in the last 10 days, within a range between 50.00 and 53.00, overshooting to a high of 56.50 in the interim. As such 56.50 remains the present Resistance and the Support being 50.00. In the short term we could see the stock re-testing 56.50. If it's not going to break out there, then the stock will pullback to the top of the range at 53.00. Once the consolidation is complete around 53.00, we could see a check at 56.50. Based on the volumes changing hands at that, thereafter we can expect a break out to test 57.70. The uptrend can finally test 59.50 before a short term correction takes place. If the said rally ends between 56.50 and 57.70, and try to move side ways in the range between 50 and 53, you must stop below 50.00. Until it closes below 50.00 on strong volumes you should not stop the trade. A rally will be strongly supported provided that the Company will continue to show positive fundamentals.

ASI will find support within a range below 6371, based on Fib Extensions

The highest the ASI reached thus far this year was 6605 on the 21st of Feb. Then it hit a low of 6417 on the 28th of March. Thereafter it reversed to test 6605, but failed to move up there. However the top at that was 6561 on the 18th of April.  Fib extensions were drawn based on these 3 points. The completion of the 1 time down trend is around 6371. Mostly the ASI up or down tests 1.27 area, and that is around 6321 points. If the trend is not going to change at the present levels, it will certainly test this range. Any trend change will 1st test between 6450 and the 100sma at 6492 points.

Plantations - Stay away until the direction is clear

Plantations were the best performing sector in 2017. But the exuberance created by way of price action in the Stocks has not been able to be supported by Profit growth. Additionally the newly emerged tension between Iran and the US has made the Iranian currency to be highly volatile. Apart from this how our Exporters maintain the shipments flowing to the country needs to see clarity in the short term. The effects of adverse dry whether in our closest rival producer i.e. Kenya is back in business better than  last year. As they were faced with the drought last year the prices for all elevations fetched above averages primarily during April and May of 2017. Comparatively this year it is not so. Traditionally the volumes of tea at the Auctions increase in May, which sparks a momentum to follow through in the months ahead. With lower prices it is not encouraging to expect higher tea volumes coming to the auctions throughout this month. On a positive note the Prices between Jan and March of this year had helped the plantations to record a higher turnover but the reflection of this performance may come in the results in the Quarter ending June 2018. Even then the the important factor will be the annualized performance. For those Plantation companies with a combination of Tea and Rubber, the bullish world oil prices is a positive signal. But it has not turned into Profits at Estate level as yet. These practical issues  are reflecting at the moment in the Price Chart of the Plantations sector, where a long consolidation is taking place since the retracement that took place in October of 2017. At present it is important for the Index to find support between 900 and 920 points. Any breakdown below will test the next support area of 800 and 845 points. For the index to head higher, a break out above 973 must take place. As such it is ideal to stay out and watch.

ALUMEX - Under pressure

Momentum in the Market has a telling effect on Alumex for the moment. Any positive sign in fundamentals will test the fate of the counter in the short term. An important support was broken. Paving the way for the stock to be under threat by the bears. 16/- acts as a psychological support. It is still early to initiate a buy after the trend failure. Let's watch.

ALUMEX - World Aluminum Prices are falling. POSITIVE for the Counter

Aluminum Futures (MALc1)  hit a high of 2700+ but retraced to a strong support at 2200. We might see it pulling up to test $2300 to $2400 but would fail with a down trend testing $2000 again. This is what's happening in the global Aluminum Markets, which is negative for ALUMEX, due to the volatile price movements. However the expectation of the trend failing to test $2000 and settling at that or below will be POSITIVE for the counter.

Present price movement in ALUMEX shows a support at 16.60. This was tested during this week and managed to survive. That's a good thing for the moment. Anyone wants to trade can do so with a stop at 16.50, =/10 cents lower than the said support. On the up side 18/= acts as the resistance, and a break out above will take it up to test 19/= and 20/= resistance levels.

MGT - Get in at the pull back!!!

MGT is testing a major resistance area of 13.50. It may break that and test 14 to 14.50. Both levels have been major support areas during the recent past. If we see 14.50 or somewhere between 14 and 14.50 we will see a pull back to test the support at 13.50. Thereafter it will reverse and trend up to break out of 14.50. However if a pull back is to happen, the period of retracement down and the reversal up can not exceed more than 3 to 4 days. If a retracement is happening wait for the 2nd or the 3rd day to enter. If we see it retracing more than 4 days the present up trend will fail. Along with this trend we need to see above average volumes changing hands like what we saw on the 19th and the 20th. Let's watch how the trend is unfolding to initiate a pull back entry.

Short Term Trading Stratergies.......... YOU EITHER WIN OR LEARN!!!

In my google sheet I started sharing trade ideas. Out of the 24 trades that were closed 14 of them were........ LOSSES. Yes may be the efforts were not rewarding. That is not a joyful experience. Also there were 9 Winning Trades. They were moments to feel happy about. This is why a Trader must be critical in his learning experience. Trading is winning and learning(loosing), and it has to be a continuous process. YOU MUST DEFEAT THE FEAR OF STOPPING YOUR TRADES.

Lot Size
One of the most important lessons to learn in trading continuously is to know your lot size. This was made crystal clear while these trade ideas were executed. If someone wants to just allocate funds that aren't manageable at the time of selling at a loss, it is a big mistake of allocating that amount in the 1st place. It is easier to stomach a loss of 1000/= on a trade than loosing 10000/=. As such your loss is what you need to master before you take into trading.  How much are you willing to loose???
Let's say you can afford to loose only LKR 1000/= per trade. Then you need to 1st figure out the quantity you would want to buy in order to take that loss. Once you figure out that only 1000 bucks you are willing to Loose Per Trade.The next you must know is the difference between your Buy price and the Stop Loss price in order to figure out the Loss Per Share. If your Buy price is 10/= and your Stop is 8/=, that means the loss per share is 2/=. Since the loss per trade is 1000/= and the loss per share is 2/=, you then divide 1000 by 2 to arrive at the quantity you'd want to buy, i.e. 500 shares. This is your LOT SIZE.

Position Size
But that's not all, once you know how much you are going to buy, you also want to know the maximum amount you want to allocate to your trade, what is your POSITION SIZE? This is what will make you control your risk further. By knowing how much you want to allocate for a trade, you will preserve funds to continuously Trade. This I call Trading Flow. As a trader you need to see your trades keep flowing, this can be done only through continuous trading. As such TRADING FLOW or FLOW OF TRADING is very important. To work out your Position Size, you must decide on a % of your funds to be allocated to each trade. If you have lkr 100,000/=, and you want only 5% to be allocated for every trade, THEN YOUR POSITION SIZE is lkr 5000/= per trade.

Remember this is serious business. It's your hard earned money that you are putting in, to make it grow. But as in any business you won't always make money.

IN GOOD TIMES YOU MAKE, IN BAD TIMES YOU LEARN. IMPORTANT THING IS TO CONTINUE IN YOUR TRADING TO ACHIEVE YOUR GOALS AND OBJECTIVES.

My google sheet is given here:

https://docs.google.com/spreadsheets/d/1YDdK1JHGGSc8i52P21vCK8MNto2-Y0H4l53PLE_ms04/edit#gid=1284556771