Originally published by Chamber of Merchants
After entering Millennium (AX:MOY) with a holding of 400,000 shares and selling at 39.5c and 40.5c a few weeks ago I was satisfied to re-enter MOY around 31.5c with a smaller position of 151,000 shares at an average price of 31.5c.
There are two charts I am looking at right now. This would be the first that I’m sure many MOY investors are watching without blinking:
From the above chart it looks like MOY is about to go free falling with no apparent support.
But let’s gain some perspective through the “Cloud Balance” Chart or Ichimoku Cloud Chart for Millenium Minerals:
In the chart above I can see that the price is finding support on the lower cloud line. You can see that previously price bounced on the upper cloud line. I use particular settings on the Ichimoku cloud which have been backtested by some of the best traders I know. I hope the Patron is reading this as support areas are good buffer zones for commencing transactions on the ASX, especially in commodities.
Conclusion
While we saw a bunch of stop losses kick in with a gap down a few days ago, yesterday displayed a buy volume of over 2.5 million. Additionally, On Balance Volume is little changed. MOY is fundamentally debt free, and heading for a profitable quarter. As a Merchant, I re-entered the trade at a trend line support. Even though I tried to pick the bottom, just like Ramelius Resources Ltd (AX:RMS), it has been testing lower resistance zones. I predicted the coming dip and spoke about the expected draw down and how I would handle the process earlier.
Additionally, I can see that MOY is finding support around the 210 million market cap level, where it previously found support. The next market cap should be around 250 million, then 300 million as the quarter progresses. That would be around 34.5c. However, if Gold completes its bounce in 2-4 days from now, I will be revising all my expectations upward.
Have a read of where I believe we are at in the bigger picture in Dollar vs Gold Price.
As a Merchant, picking the bottom should be a goal, but not an obsession. Over and over, novice traders will wait too long to enter, missing the next move up. I would often set stop losses just below my entry point, only to get kicked out by a cent, getting left behind in the bounce. I’ve done my research: If MOY.AX is heading to 46c-52c then it wouldn’t matter if I entered at 26c,28c, or 32c. Overthinking entries often left me with Analysis Paralysis: studying a stock for so long that I just couldn’t pull the trigger, ending up doing nothing at all and missing out, once again.