• Christopher Hall

Big Performances from Small Growth Companies

As the market slows down in the Bear Market rally Gary Glover from Novus Capital highlights the fast and sharp gains to be made from the ASX's top trading shares.

[00:00:09] Looking at the share market here, we got April trading opportunities and many of them hitting profit targets. The main going is through is Gary Glover from Nova's Capital. Good morning, Gary. How are you? I'm very good, Chris. Well, I'm happy to say your portfolio is up 5.5, 8 percent and the market's down eighteen point five five. Now, I'd say that performance is speaking for itself and looking through. You've got some updates here on Exene India. That worked well for the portfolio. Is there anything else that's happening in the portfolio recently? [00:00:41][31.6]

[00:00:42] Yeah, look, probably just everything's headed up a little bit there. Some of the old upbeat. But yes, but also the smaller ones that sort of these sort of smaller growth stocks are definitely moving here a lot faster than everything else at the moment. So, yeah, so those ones are probably gone through my targets and I keep counting as well. But that's that's right. [00:01:03][20.4]

[00:01:03] We're sort of I'm always trying to pick some of that, some sort of smaller mid-tier sort of one bit term. But the market still pretty robust. They are still up. Things can be messy here, but I still, still think we can get to the 50 percent of the range. So I guess some taking up a little bit of stock here in the arm and those rights issues. [00:01:24][21.5]

[00:01:25] And I'm looking for a few squalls as well, but I'm really hoping to get hit at some of these big opposing symbols, some strength here. So I made a few adjustments, like a bolt link closer and a couple of others just sort of protocol in distance. And so we could push a bit higher there than in a Ultron block. Now the portfolio there, but if we get to get near fifty eight hundred, I'm really trying to scale back the portfolio. Are quite a lot. [00:01:56][31.0]

[00:01:58] Let me jump in and have a look at the exchange to see what that level is sitting. [00:02:01][3.4]

[00:02:02] If we look at the U.S. market, it is heading north. And as you say, cities still sell into the strength as it comes and then maybe add some big positions at some points. [00:02:16][13.5]

[00:02:17] Let's look at the US market to understand where that's sitting in this process of selling into that strength and where you may transition to more of a bearish position within the portfolio. [00:02:26][9.5]

[00:02:29] Yes. I really I mean, there's a couple of levels. I would say looking at them with sixty one point eight is a bit of a trade below. Some notice they like the S&P 500, has sort of hit the. Sixty one percent, but the Dalai was just a little bit short there. So on Obama so looking for a certain level without looking for the 50 percent originally then and sixty one point nine. So one live on the S&P 500, which I think with much. I think people will probably keeping a closer eye. And in I think it might actually be the K level is the 200 day moving average, which is probably around 3000 on the S&P, but on the Dow. We've sort of hit a bit of a bit of a live one, the midst, the previous swing low. But I still think the Dow maybe can get to sixty one point eight. So. So just think we should get squeezed out a bit longer here, a bit more time used. Aside from my experience here, these bear markets, sometimes, though, the rallies can last a lot longer than one thinks. And although things might be bearish, they just market will tend to sort of squeeze everyone out first before they heads down. [00:03:36][67.2]

[00:03:37] So would we expect sort of a quick cliff dove once it hits or gets beyond that sixty one point eight? Or do you think it's a bit of work and maybe more choppiness before the elevator goes down? [00:03:47][9.2]

[00:03:48] And I really do. Questioning sales actually looked this very thing actually yesterday, looking at term to 2008, looking at 2000 top there and how it followed there. So it essentially so pretty hard. I think 36 trading days then found the first lower high three months from from from the peak. And then it fell pretty hard, actually. But it maybe came back maybe half to two thirds of the of the rally. And in a really quick rate of time. And then it was up and down, up and down. Basically, I think it actually shopped around for six months going sideways. But, you know, within that range as well. Yes. So it was very choppy for the next six months. So basically it came down to the deep ocean and went back up again, pretty high and back back down. That was really overlapping trends. Something didn't sit on top of each other. The whole thing overlapped a very volatile period. But literally took six months for it to sort of marker a retest of this sort of initial high go slightly higher. And then after that, the next was an excellent down. So that's something here. These things can take a lot longer. You know, everyone's sort of thinking we're heading for tough times and they're probably right. But markets seem that, oh, you know, it's still, Bill, uncertainty. There's a lot of money thrown in the system here. Still some business, though, still traveling pretty well. Others obviously not. So money might shift a little bit here from one to another term, but there's still uncertainty here as to how long this lasts or whether it's just a short term thing. So it just I just think if you look at those sort of how these bear markets typically set up, they just can be a lot of time in there. So I don't think we'll see a new low until maybe next year. So I think we'll basically shop around their side basically for a bit, which would be a good trading market. [00:05:40][112.1]

[00:05:42] Trading opportunities. And that sort of brings us to the Aussie where we where we see the trading opportunities on the ASX if we're looking at that Australian chart. [00:05:50][7.8]

[00:05:52] What's the health check on the rally? It's clearly lag behind the US. What's your take on the movements from the lows on the of the time and distance? [00:06:01][9.1]

[00:06:02] Yes, we've got good going there so we can see the volumes and actually come at a lower one. Massive. So basically looking at three times the normal S.O and even on the way up here, it's been pretty solid as well. So we're going to look at the shorter time frames to see us is pretty healthy across a lot of the stocks. It does vary sector by sector. But yes, some pretty strong. The thing I like about here is I've had sort of three wakes up. Then we pull back three weeks and we've held up pretty tight. So we didn't pull back to date. And if you look at where that market say that, then actual last week where the index found support was exactly 50 percent of the old range. So that's the two thousand and nine low up to the 2020 range. That's that's a pretty big range over, you know, 11 Lebanese. But that's the 50 percent of the range. And that's where we found support there, actually. It's interesting. Let's just say our next loves this 50 percent level, so loves old ranges and new ranges and loves expanding 50 percent, which retracing 50 percent just yet. So it's not there's no mistaking my heart, in fact, that faithful that we've sort of come in there just does it, Tom-Tom. So that's a really good sign here. And it's a three up three back Hoddinott level. So I still think they're not going to get up towards that fifty eight hundred there. [00:07:25][83.0]

[00:07:26] I'm looking just to shy of that. I think if it gets to 57, 50, 50 790, I'd be I'd be cutting stocks. But I still think it'll get there. I think some some reasonable signs that we can still push on. [00:07:39][13.4]

[00:07:41] And then we jump to the trading opportunities, which we've seen, as you said, some sectors in favor, some less so. [00:07:47][5.9]

[00:07:48] One of the charts you put up in the weekly report is that banks have definitely seen a lot of bad news, you and the Bendigo Shouty Cheese. [00:07:55][7.2]

[00:07:56] Some people are scratching their head and saying, is it time to buy? What's this chart telling us? [00:07:59][3.7]

[00:08:01] Yes, I would say it's come off considerably. Remember, Bendigo was one of the first to raise money. I think it raised it around nine thirty five months every four months. And so now was sorta sub six. So come off quite a bit here. Just recently sort of noticed some good lying down the lows had that pullback. Got a new low. So we got a first Haisla and then it sort of had a bit of a rally. Again, not bad volume coming in and pulling back the volume sort of drawing up again. So I think it sort of holds that previous low sort of contract sale and the volume continues to sort of drop. If we see a little bit of a mini break, we'll get a line there and that sort of 6 20 mark. If we can break up through there, I think it will continue on to maybe a a past seven dollars. [00:08:48][46.9]

[00:08:48] But, um, but I think there's some value here. But I do recognize the banks, but they've been one of the weaker sectors here. So, you know, the rally is probably going to be mild rather than rather than exciting. So but but I do you know, I think it's I think pretty safe here. So I've actually bought some for the portfolio here on the get go Monday morning. [00:09:12][23.6]

[00:09:12] I think I've got sort of ngoni, too, but I'll I'll run a pretty tight stop on it. Just goes for breaks down here. I want to be doing a second level so much something at some pretty good value here. [00:09:24][11.6]

[00:09:25] And another part of the Australian economy that's been hit hard is new car sales and dealerships being closed and a lot of them unsure when they lay off staff and whatnot. [00:09:33][8.3]

[00:09:34] But you looking through the. [00:09:36][1.7]

[00:09:37] Through the in the economy and then sort of climbing back up and saying, well, we'll actually raise sales and this is a good. [00:09:43][5.7]

[00:09:44] It would be part of the market to trade with higher leverage, your heart rate up in the 80s is the first shot you've got. So what's the rationale there? [00:09:54][9.4]

[00:09:55] It's good questioning. It's also actually on the weekend and that is quite a few stocks that sort of come up on my radar actually proving that. So the car kind of motor vehicle industry. So even car sales actually had sort of three, you know, possibly a sort of like ascending triangle sort of setup. They were spicey retested. Same level few times. And so I guess that had had a this has bounced here and tested, you know, the same level three times and a few other stocks in that sector. So just quite a few to come up there. So just go sort of thinking, you know. [00:10:27][32.4]

[00:10:29] You know about sector as well. Oh, is it? You know, I think know, obviously. There might be some reluctance to go back to public transport straight away. Maybe we'll we'll be driving a bit more, but I think I will. I think the motor vehicle. Haha, I think it would. I don't think things are gonna change too much there in the in the medium term once Swansboro restrictions are lifted, will be driving more and then we'll probably be back to normal. If anything. Probably use the car more than we had previously, so I don't see it becoming less safe. [00:10:56][27.7]

[00:10:57] If anything can be more, but I think the SEC is under been under the pump pretty hard and opportunities across the board. Broadus noticed that Tom, it's this big guy at the low there and and also the price action, it sort of bounced up and then pulled back and bounced up. So had two or three tests of the same level. And then just reminded me I went back and looked at my P.A.s stolidly and attended. This is how it sort of set up for a lot of the lozier can sort of see in 2019. Lowe did exactly the same sort of set up there, sort of it bounced off the level as a bit of bullying me counselor to see it because of the scale there, but for some reason or volume there that a term had a couple of retests men want to break through. It kicked on here. So I'd just like to look at that there. I think it's been a pretty good business. [00:11:46][48.8]

[00:11:47] Pre-nomination the past obviously just under under some bad circumstances here. But I think restrictions lifted there think that business will go largely back to normal. [00:11:57][10.4]

[00:11:58] Is it the same for the Lethem's? [00:11:59][1.0]

[00:12:01] I mean, it's so, so so the eclipse as is something similar as well. Just this time I just noticed that it had pretty good volume down the low pull back. No volume had a bit of a bounce, some raised more volume pull back again, no volume. And then we had a little update on Friday. I'm pretty. Looks pretty. Looks pretty. Pretty decent fullbacks getting Chevron and Shell and not just like the sector here. And I know a few brokers that sort of upgraded the stock as well sort of over the weekend. So for a fee positive, some thought say so. [00:12:35][34.1]

[00:12:35] Yeah, just that. Again, just put a bit of holding under. I think we're sort of under 66, I think we got set at that price on the open there and again on this front, a pretty tight stop here. And then I think the target could be pretty decent on this one. That's the beauty of these sort of sectors. Once I move, I can take a move pretty quickly. So I've just taken a small size because I can't move can move for and against Kirschner. And yeah. And also I don't wanna be too heavy as well. I think we were getting too within sort of three or four points of fifty eight hundred level. That's where I want to be out here. So I'm hoping we'll get hit on a few things like an awful long a few short things which might move a bit of luck. Maybe I'll get eight to us, 10 percent for the year out. That would be at my um. [00:13:20][45.3]

[00:13:21] That's my hope. And then look at all the way down here. [00:13:25][4.4]

[00:13:27] A controversial one that could get you there quickly or blow it up is Webjet. [00:13:31][4.1]

[00:13:31] So there's a here hearing me to finish you off your way. Therefore, you tell yourself what I can veto. Keep this guy out of Webjet into. [00:13:40][8.7]

[00:13:41] Look, I just put in there. I haven't actually put it in the portfolio as much as I was. I was pretty close to actually putting it in there. But I just and technically it's had a massive drop. He obviously raised some equity. So the you know, so I think at some it's raised quite a bit there. It's it's almost like it's close to double the shares on issue. So it's never going to return back to $12 if family money to go back to 16A because it's twice as many shares initially. But but it's like the tentacles. They just telling me it looks looks pretty robust. Yeah, I do love this business. And it's also webjet to a little bit more domestic as well then some of the other things. Yeah. Yeah. [00:14:23][41.9]

[00:14:23] So there's sort of this sub, not all the business is going to be ripped up into the foot for the for the short term. So. So yeah. So this is I think quite like myself probably probably on a holiday domestically here for a while. So it's clear. Yeah. Which which which means up. We did quite well in that segment with Tom. But yeah. And just as I have put in. [00:14:47][23.8]

[00:14:47] But I do I just I thought maybe, maybe this can bounce back to sort of, you know, five or six dollars here in quick time to sink it. The old old technical songs were pretty interesting, may sound the term, but I've left a line just just because of the risk shot worth watching. [00:15:01][13.5]

[00:15:02] Thank you very much, Gary Glover from Nervous Capital. We look forward to seeing how these trades pan out next week and see whether we do shift that portfolio to the better side. And you'll be the main audience. Thank you again. Thanks, Chris. [00:15:13][11.5]


Arrow Securities Group
Copyright © Arrow Securities Group Pty Ltd 2018
ABN  30 165 731 144   AFSL 448218