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     holycow
Member
Username: holycow
Post Number: 2282
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Thursday, June 22, 2006 - 07:19 pm: |  
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1) a picture tells a 1000 words;
2) 2 charts tell 2000 words and it is all start with zzzzZZZZ!
3) it's time to sleep! No? Okay, tell me why ZFX/zinc is so good? The stock has lost close to 60% in one month!
4)... yes, I hear you - it's just a minor correction and the demand is still good.
HC
"... if you've got a chart, I have an opinion!"
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dug
Member
Username: dug
Post Number: 1195
Registered: 07-2005
Rating: N/A
Votes: 0
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| | Saturday, June 24, 2006 - 12:12 pm: |
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Greetings HC,
For Starters,there's a 40% loss nix 60! {60%IS POTENTIAL up!}]
sO HOLDERS FOR D'rUN TO 1350 ARE 40% down FOR THE TIME IT HIT 801.
Now we know from Forum Posts that A.Hull backgrounds many of our FA premium posters,right HC?
So we can ASSUME when doing d'dissect of What d'Hell is HAPPENING!! that AHull is basic.Do you see,HC how the above chart maps out thinkingFA about ZFX by A Hull devotees?
If you really want to stuuur d'Pot,HC.How about doing KZL?
For a Start.What do you think of Gap Closing?What's d'Psychology behind Gaps?Why are they often filled and why'n'when are they left Gapping?
cheers HC,
jr
Avatar- PHACOPS{speculator}from the Devonian Period.
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holycow
Member
Username: holycow
Post Number: 2287
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Saturday, June 24, 2006 - 03:34 pm: |
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Dug,
I took the lowest sp@8.01 and divide it by the highest sp@13.54 and got 0.591 which ... yes, yes yes about 40% loss and not 60! Damn! My mistake.
Okay, here's the point - can/should we assume this 40% "extra value" as due to speculation and got nothing to do with "fundamentals", ie, company profitability, demand on zinc, Chinese Santa Claus, etc?
Anyway, let's see if ZFX's SP is able to hold its ground at the current level and pull through the correction - it it fails, chances are high that there's still a fair bit of speculative "fat" on this one and that the current assumption on the zinc, the company profit/growth, etc are "a little too rich" "way too high" "too rosy" "castle in the air" "blah blah blah (this one throws in for "special effect")"...
On KZL, I think I will avoid commenting on this one, not that I don't have an opinion but I just don't like to poke my finger into other's eyes unnecessarily. The general idea here is - "follow the leader" - this is the "core" marketing rule which says, in every competitive market the market leader tends to determine the direction and lead the rest - a case of the dog wagging its tail and not the other way round.
A good way to see if KZL is "fine" is by comparing its percentage gain against ZFX's from say 15/10/2004 onward - this at least gives you a relative/comparative pricing of this stock.
Cheers.
HC
"... if you've got a chart, I have an opinion!"
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holycow
Member
Username: holycow
Post Number: 2288
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Saturday, June 24, 2006 - 07:21 pm: |
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CDO Daily
1) DUG, you have to treat gap with a little discretion coz not all gaps are borned the same. Some are baddies. Gap forms out of the "blue" are good gap - the SP jumps probably in reaction to some good news where insiders/speculators/dad&mum/tomdickharry heard or read about this "news" either through the grapevines or somewhere that they are willing to "bet" a higher price before the masses.
I think CDO is a recent good example.
Also bear in mind this simple "rule" - ride the first and the second gap (if the sp has not gone too far up), but avoid the 3rd one because it is most likely an exhaustion gap since by then everyone can "see" it.
NWS, BHP are "habitual" gappers - my "theory" on them gapping all the time - due to overseas "speculation" and overnight residual effect from overseas, hence you see them jumping like a yoyo and make really ugly chart. The way to deal with them I think is through weekly chart. That way you can avoid quite a fair bit of daily "whipsaws" and heartburn.
NWS Daily
BHP Daily
BHP Weekly
... the weekly BHP shows it may be a good "bet" hence I don't mind to "sink" some fund into it. Even in such "bad times".
HC
"... if you've got a chart, I have an opinion!"
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holycow
Member
Username: holycow
Post Number: 2289
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Saturday, June 24, 2006 - 07:23 pm: |
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... wrong notation - oversold/OS in the RSI chart above should be Overbought/OB
HC
"... if you've got a chart, I have an opinion!"
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rederob
Member
Username: rederob
Post Number: 1822
Registered: 10-2002Rating: N/A
Votes: 0
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| | Sunday, June 25, 2006 - 12:37 am: |
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If you want to look at charts of stock that are predicated on commodities futures prices - because the companies are largely unhedged - then one should look at what the futures markets are doing, and what is driving them.
All the base metals are presently technically oversold.
Zinc - RSI of 38 - is second to lead in weakness: Both metals are principal products of ZFX.
What is the near term suggesting?
Cyclically, base metals go into a lull around now in anticipation of northern producers not restocking as summer holiday closures near.
So one should expect the likes of ZFX and KZL to meander for a little while.
Fundamentals paint a slightly different picture.
Zinc metal tightness continues as supply consistently fails to make any inroads into exchange stock levels. Re-warranting of damaged zinc into New Orleans warehouse is nearing an end, with perhaps only another 10,000 tonnes to be returned: Once this re-warranting is over a clearer picture of zinc's fundamentals will appear: New Orleans has 70% of zinc inventory, and 50% of it is cancelled.
Overall, 27% of total inventory for zinc at LME warehouses is cancelled; ensuring that zinc's fundamentals will continue to tighten for at least the next month as a large share of its 63k tonnes of cancelled metal departs the system.
KZL has copper exposure in addition to zinc, so its share price movements may differ a little from ZFX's (which has lead as its principal byproduct). Copper market fundamentals are much better than lead's so I mark KZL as a preferred stock to ZFX on the basis of metals mined.
I note the bears talk continuously about the "speculative" nature of metals markets. It's some big deal, apparently, that a stock can be at the whim of speculators!
The reality is that speculators can influence daily stock prices, but they do not operate the mines of companies that produce the metals they speculate on. Both KZL and ZFX are in good shape from operational perspectives, and even if metal prices declined further, both these companies will be making handsome profits over the next 12 months and probably much longer. In any event, within 3 months the fundamentals for both these stocks will kick back in and launch them significantly higher than they are today; and in my estimation greater market tightness will see them claim new highs before year's end.
The only relevance of present share prices is if you are going to buy or sell, otherwise keep an eye out to the future and your trading/investment plan.
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holycow
Member
Username: holycow
Post Number: 2291
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Sunday, June 25, 2006 - 10:27 am: |
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...the bears talk continuously about the "speculative" nature of metals markets while the bulls like to talk continuously about everything from mine production to LME warehouse to why demand is always greater than supply... and then blah blah blah.
Fact is this, in the last one month or so many metal stocks in ASX had quite some haircut rangeing from 35% onward. I am sure this has nothing to do with speculation but rather a "pause" in buying. Like they say... "there is no change in fundamentals".
At this point, I am no bull nor bear, but don't mind to say this if you are right I will get back into KZL or ZFX - this is not my religion or ideology battle. If ZFX retests 8.00 and bounces from there, I will be ra-ra-ing on your side - call me a bull then if you like.
ps: seriously I am considering suggesting to the bulls in this forum to make a disclaimer on why they have to write a) excessively continuously bullish and positive view; b) clarifying why they are buying and suggesting they are always buying cheap when the market falls. I think the newbies deserve to know why.
HC
"... if you've got a chart, I have an opinion!"
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rederob
Member
Username: rederob
Post Number: 1823
Registered: 10-2002Rating: N/A
Votes: 0
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| | Sunday, June 25, 2006 - 01:52 pm: |
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ps: seriously I am considering suggesting to the bulls in this forum to make a disclaimer on why they have to write a) excessively continuously bullish and positive view; b) clarifying why they are buying and suggesting they are always buying cheap when the market falls. I think the newbies deserve to know why.
We could also suggest the opposite applies.
However, the principal issues relate to buying, selling or holding shares and readers have every opportunity to question any poster's views.
In relation to zinc the fundamentals of supply are resting on a very small sector of the mining industry which is highly visible and therefore quite transparent from an analytical perspective.
Exchange warehouse stock levels via LME show a safe trend of supply shortage with metal withdrawals constant and firm over the past year and a half.
Add to this steel's growth phase and the construction of more zinc coating (of steel) mills in Asia and it gets hard to find a safe hiding place for medium term bears.
As noted earlier, these fundamentals do not drive the daily price of the underlying metal of producers, as these metals are traded separately, with hedge funds, pension funds, consumers, commercials and speculators regularly mentioned as causing the big price movements.
Looking specifically at ZFX, what does the chart suggest about its cost of production, its future operational or exploration plans, any maintenance shutdowns, its profit forecasts or its future dividends? Does the chart say ZFX will drop to $8 or $7 or $5, or will it rise to $10?
Charts say nothing about the future.
Indicators can tell you that ZFX is presently oversold, and should rise again, but you don't get a guarantee. You certainly don't get told the day or week it will happen.
In raging bull or bar markets it's not unusual for equities to be in critically over-bought/sold positions for weeks at a time.
Telling newbies I/we/you are buying a particular stock means what?
That they know what we are buying?
If they don't know how we trade or invest, it's somewhat irrelevant.
My last purchase was TEN, for its dividend and for the possible effects of market deregulation.
My next purchase will be CWT if its price drops to 70 cents again - for dividend and for a restructuring of the wine industry in Australia.
The only relevance of charts to these purchases is the entry prices I choose.
Most stock purchases are proved good or bad in hindsight.
But the purchases themselves are best made with foresight.
Traders might have in place stop loss strategies to mitigate capital depletion, and selling strategies to maximise profits.
These are excellent to have.
But they key remains the chosen stock.
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holycow
Member
Username: holycow
Post Number: 2292
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Sunday, June 25, 2006 - 02:59 pm: |
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... now I have no quarrel with what you have written - sensible logical cool calm and collect; although I don't quite agree with all of the points raised but that's all subjective. The reader shall decide.
HC
"... if you've got a chart, I have an opinion!"
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peterloh
Member
Username: peterloh
Post Number: 1886
Registered: 03-2003Rating: N/A
Votes: 0
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| | Sunday, June 25, 2006 - 07:51 pm: |
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rederob,
Agree with you the selection of individual share is how we view the share will perform in the future.A share can only go three ways, if they don't go up or down, they will go sideways. Considering ZFX has retraced about 60%, the likely hood of ZFX falling further is less than the upside risk.Considering that ZFX has a minor setback, in the long term ZFX is still operating profitably.On top of this ZFX has excess cash which it is using for a buyback to reduce the number of shares in the market.ZFX can also buy other mines to increase the current profitability.All this will put a bottom to ZFX's price, a support at a certain level they can elect to have.
Whether, the share price can sustain at current level and to move up to another level is dependent whether demand of the metal will fall or new supply coming on to the market.Demand will not fall in a hurry, as world economy grows, this will grow or at least continue at this level.
China is currently producing about a thousand vehicles a day and this will continue to grow in the near future.Moreover new roads will have to be build for them.Zinc is a very small component of steel and is less elastic of price increases.The ability of iron ore miners to increase the price of iron ore is an indication the production of steel will not drop but in fact increase.Zinc supply cannot be increased in a hurry as evidenced by the falling world inventory.
ZFX is a developed miner (the old Pasminco) whereas KZL is the new boy in the block, you will find that the potential of KZL is yet to be fully realised and accordingly factored into the price of KZL, a higher pe ratio than ZFX.Both ZFX and KZL are profitable mines and will in time to come improve their profitability.The fact that Korea Zinc has increased its holdings in KZL is a confirmation of their faith in KZL in the future.
I believe it is a golden era for commodities and Australia is in the midst of it.I am more bullish on the upside of energy and resources than the downside and accordingly I put my money where my mouth is.I have bought on the retrace because I have used it as an opportunity to buy in at a good price, not as some that sold because they see it it as all is coming to an end.
If you look at following the leader, yet KZL has only fallen far less and recovered faster than ZFX.You can say the same of OST as compare to BSL, it is just not comparable, due to different market they are in and different finished product they are selling .I think the bottom up approach is more relevant than looking at the industrial as a whole. Even fund managers are today getting a way from this bench marking system and concentrating more on share selection.So in this cas I do not believe in following the leader.
I do not hold BSL or ZFX but hold OST and KZL.If HC has another view of ZKL, he is well come to put forward his view.
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Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis. It is not made in my professional capacity and should not be taken as advice.In my professional capacity I am only allowed to give advice on certain managed funds authorised by my license dealer.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. Please consult your stock broker or financial adviser in regard to your personal situation.
The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect.It should not be relied upon as a recommendation or forecast by the writer.
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peterloh
Member
Username: peterloh
Post Number: 1887
Registered: 03-2003Rating: N/A
Votes: 0
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| | Sunday, June 25, 2006 - 07:56 pm: |
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HC,
your "60%" retracement is infectious, 40% a minor correction of ZFX as in Fibonnacci or closed to it?
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Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis. It is not made in my professional capacity and should not be taken as advice.In my professional capacity I am only allowed to give advice on certain managed funds authorised by my license dealer.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. Please consult your stock broker or financial adviser in regard to your personal situation.
The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect.It should not be relied upon as a recommendation or forecast by the writer.
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