10 weeks to Christmas.....Horizonte Minerals

Thursday, 18th October 2012 15:52 - by Moosh

HZM made a 100% price movement at the start of 2012, followed by a gradual fall to 7p in Summer 2012..

The following hypothetical set of trades gets buy points (taken as midprice) from a combined VOH (hourly volume oscillator rising up through -1) and hourly kumo breakout, and sell points when the sell price exceeds the R2 (pivot point second resistance level) for the day.

1. 18 June 2012                      BUY 1500 @ 8.25p                            total = £131.87
2. 30 July 2012                       BUY 1500 @ 7.875p                          total = £126.22
3. 21 August 2012                  SELL 2796 @ 9.5p                              total = £258.12

Total bought         3000 shares for £258.09

Total sold             2796 shares for £258.12

Therefore 204 shares remain, which at 9.5p, are worth £19.38 or 7.5% return.

1. 18 June 2012                      BUY 8.25p

This hourly kumo breakout (or ‘attempt to trend’) did result in a nice fairly immediate price rise to 9.625p within a few days but the attempt to trend failed and the price was back under the hourly kumo within a few days of that recent peak.

2. 30 July 2012                        BUY 7.875p

The next hourly kumo breakout did eventually lead to a slow and steady rise over the course of ~3 weeks by a standard 9/100/200 hour exponential moving average Elliott wave, which is the kind of timeframe I’m normally expecting for a short term uptrend, certainly NOT hours or a few days, although, if news causes a marked price surge before the wave kicks in properly then I am likely to sell on the news, especially if R2 has been exceeded.

3. 21 August 2012                  SELL 9.5p

Evolution of the Elliott wave resulted in momentum gathering towards the end of August and without news the sell price rushed upwards and headed above R2 and outside the upper hourly Bollinger band (20 period) with the hourly buy/sell ratio very buy heavy – the combination of these normally triggers a ‘SELL SELL SELL’ buzzer in my head, and at the time (in reality) 9.5p would have landed my 3000 shares in profit, albeit 7.5%.

The very next day (22 August 2012), the reason for the previous build-up in price became clear – a news release about a Preliminary Economic Assessment for an HZM project. Unfortunately this is when volume decided to enter HZM, which indeed created a final surge in price to ~11.25p before finding itself back down to as low as 8.625p on 24 August 2012. So was it wrong to sell at 9.5p before news? What if news didn’t come along? With the price already extremely overbought on daily slow stochastic, the chances of a fall without news was high – that’s the point of the ‘overbought’ concept.