Australian Portfolio post G20
Post G20
Portfolio Holdings
One of the darkest clouds hanging over Global markets has dissipated on the weekend when China and the United States agreed to shelve any new tariffs and reset discussions, at least temporarily halting an increase in their tensions over trade.
The agreement, lasting 90 days, between Chinese President Xi Jinping and U.S. President Donald Trump at the G20 summit spelled a reprieve for stocks and this could pave the way for a positive close to a volatile trading year.
US Markets
U.S. stock index futures jumped, with benchmark S&P 500 e-mini futures up 1.55 percent. Treasury futures were softer, suggesting the change in appetite for risk-taking could extend last week's gains in the stock market. These gains included some bell weather names like Caterpillar and Microsoft along with Tech names Nividia
In the Australian market
China facing equities and equities with US exposure have received the bid on open into today’s trading.
The portfolio currently holds BSL who have exposure in the US and China, and have also announced a buy back.
Both China facing A2M and BAL have had strong opens today with A2M up 3% and BAL up 8% overall.
From the last review I have closed the SGM position at $11.50 with a small loss, this stock is traded down to $10.60, with the change in market sentiment under way from the G20 meeting, the stock has opened higher this week and still below the exit price, this opens the window for a new entry at a better price.
Taking a look at some of the research that goes into trade selection. Looking for chart patterns that pay off is the key to building winning positions. Some time can be used looking at sectors on the move and sectors that feature in news reports. This example of GXY a lithium producer, has a small outline of the company operations and some observations of the current price action.
Galaxy Resources Limited is an Australia-based company engaged in mineral exploration and processing. The Company's principal activities include the production of Lithium Carbonate and exploration for minerals. Its segments include Australian operations along with Argentina and Canada operations.
The daily chart has been in a sustained downtrend but is showing an inverse head and shoulder pattern. The current right shoulder is the “higher low” required for a potential larger trend reversal.
Resistance is shown at $2.85 ( neckline ) in the coming days this chart will be montiored for a breakout over the neck line and trade entry point.
The portfolio since inception was set up to highlight two senarios, the first centres around the risk of taking risk, this means the risk of large positions.
With an opening balance of $10,000 the account has held several positions and today is 3% higher than the starting balance.
With some stop losses taken along the way as the underlying equities market fell an overall 11.5% from the highs beginning the same week the account was started in early October, it has been a baptism of fire.
And highlights the importance of position sizing and risk management.
Position sizing is set so that should the stop loss be taken the account will lose about 2% of value. From this methodology the account balance swings will be limited. This portfolio is taken with a BUY and HOLD view to capture underlying trend movements.
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