Technical Analysis - Summary of PSAR, Bollinger Bands, Triangles

Ref: http://ozstock.blogspot.com


This is a quick summary of 3 other methods of Technical Analysis. As usual, each method by itself is not as good as using a combination of methods.

PSAR - Parabolic Stop and Reverse
- only use in trending markets
- use as exit tool or trailing stop
- BUY - Price hits PSAR from below
- SELL - Price hits PSAR from above

Bollinger Bands
- Middle Band - 20 period moving average
- Upper Band - Middle Band + 2 standard deviations
- Lower Band - Middle Band - 2 standard deviations
- Use with Double Top of Double Bottom - need the first peak to be outside the Band and the second peak to be inside the band

Triangles
- ascending, descending, symmetrical
- breakout may be in either direction in all 3 types of triangles.
- enter when breakout
- stop loss set inside triangles

These indicators and a few others are shown in the example of the ASX 200 below. The conclusion is that there is no obvious trend of the ASX at the moment as the market is trading indecisive with not much direction.

Brief - PAG - PrimeAG Australia

This is going to be a very brief note about PrimeAG (PAG). Rcently PAG caught my attention because of the recent strong uptrend. I have been studying a few technical gurus (Gann, Weinstein),  methods on Technical Analysis and clearly the strong uptrend would be one reason to buy. See graph below.

However, although I may wish to go for a short term, technical play, I also glanced at the fundamentals. One of my recent indicators I followed, which I will use more of, is the ROE. I would be looking for ROE of at least 15% for long term play. For short term play, a smaller ROE will suffice.

However, PAG's fundamentals is this: ROE is almost Zero. It had made a loss recently, ie. negative earnings and profit. One of the only positive ratio is the book value of $1.89 (from CMC Markets). Based on this, I will make no further analysis for now.

One point more on the Technicals, the uptrend has not been strongly supported by heavy volume. If there was heavy volume, then the case based on technicals would be stronger.

Note to Self: avoid this stock unless I feel very very lucky.

Note to Self

5 Oct 2010

ESG - wait till go up 85-90c
STO - buy when rebound from 12.30 to 12.50
AMP - ROE 40.50 54.80 27.00 29.50, wait for technicals
TGA - sell when below 1.40
TIS - buy when breakout 25
CUV - sell when close under 19

TZL - wait for break above 50c
VLA - wait for break above 35c
POH - wait for break above 11c


CMC Market allows a simple filtering system.
- ROE > 15%
- Debt / Equity < 0.5
- Market Cap < 100,000, 000
- 5 yr avg annual return > 10%
- Net Profit > 10,000,000

the results from the filtering were:
TBR - Tribune Resources NL
TWD - Tamawood Limited