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The Traders Forum

The Traders Forum. Presenter: Shaun van den Berg Head of Client Education. Tuesday 12 th March 2013. Agenda. Technical Market Overview Technical Trading Support & Resistance Fibonacci Retracement Moving Averages Stochastic & RSI indicators

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The Traders Forum

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  1. The Traders Forum Presenter: Shaun van den Berg Head of Client Education Tuesday 12th March 2013

  2. Agenda • Technical Market Overview • Technical Trading • Support & Resistance • Fibonacci Retracement • Moving Averages • Stochastic & RSI indicators • The Stockbroker (Trade Ideas) • The Investor (Long-term Investment Opportunities) • Open the Floor • Upcoming Webinars • Summary • Conclusion

  3. Technical Market Overview

  4. Technical Overview • Dow Jones Industrial Average • Hang Seng & Nikkei Indices • DAX Index • Brent Crude Oil • Gold $ & Platinum $ • Euro / US $ • Rand $ • JSE Top 40 Index • JSE FINDI 30 Index • JSE Mining Index

  5. Dow Jones Industrial Average (Weekly) Resistance Support Bullish

  6. Hang Seng Index (Weekly) Resistance Support Bullish

  7. Nikkei Index (Weekly) Resistance Support Bullish

  8. DAX Index (Weekly) Resistance Support Bullish

  9. Brent Oil Resistance Resistance Support Support Support Bullish

  10. Gold $ Resistance Resistance Channel Resistance Support Support Support Bearish

  11. Platinum $ Resistance Support / Resistance Support Support Bullish

  12. Euro/ USD Support Resistance Resistance USD Weakness

  13. Rand $ Resistance Resistance ZAR Weakness

  14. JSE Top 40 Index Resistance Support Resistance Support Bullish

  15. JSE FINDI 30 Index Support Resistance Support Bullish

  16. JSE Mining Index Support Support Bullish

  17. Summary: Technical Overview • Gold $ • Bearish / Support • Platinum $ • Bullish / Support • EUR/ZAR • Weakness • Resistance • Rand $ • Weakness • JSE Top 40 Index • Bullish • JSE FINDI 30 Index • Bullish • Overbought • JSE Mining Index • Bullish / Support • 61.8% Fib retracement • DJIA • Bullish • Broken Resistance • Becoming Overbought • Hang Seng Index • Bullish / Overbought • Broken Support • Nikkei Index • Bullish • Overbought • DAX Index • Bullish / Overbought • Broken Support • New Highs • Brent Crude Oil • Bullish / Broken Support

  18. Technical Analysis Support & Resistance / Trend Lines / Fibonacci retracement Moving Averages Stochastic & RSI indicators

  19. Support & Resistance Resistance Resistance Resistance Support Support Resistance Resistance Support Resistance Support Support Resistance Support Resistance Support Support & Resistance levels highlight possible “turning points” Support

  20. Trend Lines As long as the price stays above/ below the Support or Resistance lines, the trend is either bullish or bearish Resistance Trend Line Support Trend Line Resistance Trend Line Support Trend Line

  21. Support & Resistance / Trend Lines Resistance Support Resistance Resistance Support Support Resistance Support Support

  22. Fibonacci Retracements • Series of numbers - Add the previous two numbers to come up with the next number in the sequence. • Example: 1,1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144 … • “Golden Mean” - Measure the ratio of any number to the succeeding higher number • Example: 1/2 = .500, 2/3 = 0.666, 3/5 = 0.666 …. 34/55 = .618. • Measure the ratio between alternate numbers • Example: 1/3 = 0.333, 2/5 = 0.400, ….34/89 = 0.382 • Fibonacci Retracement Levels • 0.236, 0.382, 0.500, 0.618, 0.764 • Fibonacci Extension Levels • 0, 0.382, 0.618, 1.000, 1.382, 1.618

  23. Fibonacci Retracements • First draw a line between two extreme points (i.e., a significant trough & peak). (It is always applied from left to right) • It measures the size of a price move & subsequently places horizontal support & resistance levels on a price chart - Used to make trading decisions • A series of up to nine horizontal lines will be drawn at the Fibonacci levels of 0.0%, 23.6%, 38.2%, 50.0%, 61.8%, 100%, 161.8%, 261.8%, & 423.6%. • After a significant move (either up or down), prices will often rebound & retrace a significant portion (if not all) of the original move. • The 38.2%, 50% & 61.8% levels are the most commonly used levels that the price could retrace back to. • The Fibonacci tool can also project extension levels that show where the price could go to - Used for profit taking or even counter trend entries. • Most common extension levels used by traders are the 138.2% & 161.8%. • Note: Fibonacci is not a trading system in itself –used in conjunction with/ part of a trading system.

  24. Fibonacci Retracements

  25. Fibonacci Retracements

  26. Fibonacci Retracements

  27. Fibonacci Extensions

  28. Moving Average Crossovers • Moving Averages (MA) smooth out the data / Warn of a trend change after it has taken place. • A crossover is any penetration of a MA – Whipsaws (False signals). • Valid penetrations - Filtering techniques. For example: • Take action on a MA crossover 3% penetration / Ignore all others. • Better way to avoid whipsaws - Use more than one MA. • Signals are given by a shorter-term MA crossing above or below a longer-term MA. • Two MAs found to be reliable in determining primary market moves are the 50-day (10-week) & 200-day (40-week) moving average crossover. • Buy signals - When the 50-day or 10-week MA moves above the 200-day or 40-week MA & when the 200-day or 40-week MA is advancing. • Sell signals - When the 50-day or 10-week MA moves below the 200-day or 40-week MA and when the 200-day or 40-week MA is declining.

  29. Moving Average Crossovers

  30. Stochastic Indicator • Stochastic - oscillator that indicates overbought & oversoldconditions in the market. • During periods of price decreases, the price closes tend to accumulate near the low of the price range • During periods of price increases, the price closes tend to accumulate near the high of the price range. • Slow Stochastic - Smoothed by means of a MA. • The Slow Stochastic, plots two lines: the %K and %D. • Area above 80 - Overbought • Area below 20 - Oversold

  31. Stochastic Indicator

  32. RSI indicator • Relative Strength measures the strength of one entity relative to the strength of another entity. • RSI indicator – Compare the internal strength / "Internal Strength Index • Momentum indicator - Measures an equity's price relative to itself / Relative to its past performance. • Front weighted - Gives a better velocity reading than other indicators. • Less affected by sharp rises or falls in price performance / Filters out some of the 'noise' in trading activity. • Buy & sell levels depend on period used • Shorter periods volatile indicator that reaches further extremes. • Longer periods less volatile but reaches extremes less often. • Vast majority seem to change direction at 30 & 70. • Treats price as a rubber band - Stretch just so far - forced to contract. • Lends itself to trend lines, support & resistance lines,& divergence. • Look for divergence between price action and RSI. • Upwardly sloping price & downward sloping RSI – warning / one of them is wrong - Price is about to break down. • Downward sloping price & upward sloping RSI - Price is about to break up.

  33. RSI indicator

  34. The Stockbroker Technical & Trade Ideas

  35. The Stockbroker Trade Ideas Trade Spotlights Daily & Intra-daynewsletter CFD & SSF Trader Stops Swing Traders Target Price Entry Levels

  36. Average Trade Duration

  37. Sectors

  38. Longs versus Shorts Shorts: 28/80 = 35% Longs: 52/80 = 65%

  39. Total Performance

  40. Winners versus Losers Losers: 34/80 = 42.5% Winners: 46/80 = 57.5%

  41. First Quarter 2013 Trades 22 Trades 13 Losers (59.10%) 9 Winners (40.90%) Losers: 45.81% / 13 = - 3.52% Winners: 49.74% / 9 = 5.53%

  42. Trade Ideas Trade Spotlights • ABIL (ABL) • Implats (IMP) Closed Trades • PPC (PPC) • LifeHC (LHC) Open Trades • BHP Billiton (BIL) • Vodacom (VOD) Unopened Trades • TFG (TFG) • Old Mutual (OML) Email Shaunvdb@psgonline.co.zato be added to The Stockbroker mailing list

  43. Closed Trades : PPC (PPC) Instrument: CFD / SSF Direction: Buy / Long Entry: 3385c Take Profit: 3600c Stop loss:3301c Risk/ Reward: 1:2.56 Potential Profit: 215c per share 6.35% (36.29%) Closed @ 3600c 6.35% (36.29%)* *17.5%

  44. Closed Trades : LifeHC (LHC) Instrument: CFD / SSF Direction: Buy / Long Entry: 3209c Take Profit: 3600c Stop loss:3099c Risk/ Reward: 1:3.554 Potential Profit: 391c per share 12.18% (81.23%) Closed @ 3400c 5.95% (39.68%)

  45. Open Trades: Vodacom (VOD) Instrument: CFD / SSF Direction: Buy / Long Entry: 11825c Take Profit: 12500c Stop loss:11500c Risk/ Reward: 1:2.58 Potential Profit: 675c per share 5.71% (38%)

  46. Open Trades: BHP Billiton (BIL) Instrument: CFD / SSF Direction: Buy / Long Entry: 28620c Take Profit: 31000c Stop loss:27700c Risk/ Reward: 1:2.58 Potential Profit: 2380c per share 8.32% (55.47%)

  47. Unopened Trades: TFG (TFG) Instrument: CFD / SSF Direction: Buy / Long Entry: 10950c Take Profit: 11895c Stop loss:10595c Risk/ Reward: 1:2.66 Potential Profit: 945c per share 8.63% (49.31%)* *17.5%

  48. Unopened Trades: Old Mutual (OML) Instrument: SSF Direction: Sell / Short Entry: 2845c Take Profit: 2660c Stop loss:2920c Risk/ Reward: 1:2.46 Potential Profit: 185c per share 6.50% (43.35%)

  49. Trade Spotlights: ABIL (ABL)

  50. Trade Spotlights: Implats (IMP)

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