Trading Day Monday, 23rd May 2011

S&P/ASX200 Index

The S&P/ASX 200 is down over 80 points or 1.5% at midday, reversing all of last week’s gains. Fear is gripping
the Asian markets as well, with the Nikkei down 1.3%, the Hang Seng down 1.55% and Singapore over 1%.
The AUD is down below 1.06 at 1.0585 against the USD, whilst gold is above $1509 USD an ounce and WTI oil
at $99 USD per barrel.

Daily charts show a lot of weakness overall and imply a probable sideways move around the 4600 and 4800
levels. If prices close below 4650 points, the next target level is 4500 points, for a 10% overall correction in
prices since the April high.

Chart 1. Daily candlestick with linear regression channel since start of year and 21 day TMO

ABOUT DISCLAIMER
The Prince is a full The content of this document should not be taken as investment advice or construed as a
time trader with recommendation to buy or sell any security or financial instrument, or to participate in any
extensive experience particular trading or investment strategy. The views expressed are the opinion of the author
in equities and only. The author may have a position in any of the securities mentioned. Any action that you
derivatives trading take as a result of information or analysis is ultimately your responsibility. Consult someone
and portfolio who claims to have a qualification before making any investment decisions.
management.

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 Monday, 23rd May 2011

Daily Stock Scan

How to read What does “position” mean?

These watchlists are the results of end-of-week Bullish = looking to add/start long position
scans, using a medium term trading system to Bearish = looking to add/start short position
ascertain the strength, direction and momentum of Hold = maintained current position
trends.
Avoid = wait for direction/catalyst
This intra-day report will pinpoint possible entries
Shaded notes mean a change in position
and exits based on a short term trading system.
Go to the glossary at the end of the report for more
information.

Name Code Pattern/Stance Position Notes

AGL Energy AGK Sideways bullish AVOID Down 1% but approaching trendline support at
$14.30 - close below that level is bearish

AMP Limited AMP Sideways bullish AVOID Down almost 1% - congesting around $5.25 in
possible buy box - no action yet

ANZ Banking ANZ Sideways bullish AVOID The first casualty - down almost 2.5% and right on
support levels. Close below this is VERY bearish

ASX Limited ASX Sideways bullish AVOID Down 1.4% - watch closely

BHP-Billiton BHP Sideways bearish AVOID Next casualty - very strong support at $43.50 - very
bearish if close below $43 - H and S almost complete

Bluescope Steel BSL Medium term downtrend BEARISH Down 3.5% - stop at $1.50 or less

Boral BLD Medium term downtrend BEARISH Down over 2% - target is $4.20

Caltex CTX Sideways bearish AVOID Down over 2% - faint H and S forming - close below
$13.60 is bearish (lots of support there)

Coca-Cola CCL Medium term uptrend BULLISH Down, and it looks like the medium term uptrend is
Amatil slowing down.

Cochlear COH Medium term uptrend AVOID More selling today - desending triangle forming, with
very strong support at $80

Commonwealth CBA Sideways bearish AVOID Down 1.6% and looking weak - strong support above
$51, but this is messy so far

CSL CSL Sideways volatile AVOID Down almost 1% - technicals support a short, but
support is very strong with CSL (and should be at
those prices!)

CSR CSR Sideways bearish AVOID Down 0.7% but within a sideways channel - watch for
breakouts here (and sugar futures)

David Jones DJS Sideways bearish BEARISH Down over 2% - Friday’s close was clear signal

Fairfax Media FXJ Sideways bearish AVOID Down 0.8% - as I said - last week’s action was more
likely a bull trap - but stay away due to possible
earnings/selling announcements

Fortescue FMG Sideways bullish AVOID Down over 1.5%, and forming a symmetrical triangle
Metals - getting weaker...

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 Monday, 23rd May 2011

Name Code Pattern/Stance Position Notes

Harvey Norman HVN Medium term downtrend BEARISH Down 1.6% - still life left in this short...

JB Hi-Fi JBH Sideways bearish BEARISH Down 1.1% and broken through support - the best
retailer out there, but no love for them

Macquarie MQG Sideways bearish AVOID Down 1.6% - still looking for close below $34 before
starting a short position.

Myer Holdings MYR Sideways bearish BEARISH Down 1% and falling fast - take some profits on a
possible rebound occuring soon

National Aust. NAB Sideways bearish BEARISH Now, NAB has had the highest run up of all the banks
Bank and is forming a sweet H and S pattern. This is early
days yet, because NAB is the market darling at the
moment. But I reckon there’s something afoot here...

Newcrest NCM Sideways bearish AVOID Down 0.8% - replicating BHP almost in price
Mining pattern...

Onesteel Ltd OST Short term downtrend BEARISH Down almost 3% - what a ride!

Oz Minerals OZL Sideways bullish AVOID Down over 3% - got that wrong - wait and watch

Qantas Airways QAN Sideways bearish AVOID steady, going nowhere

QBE Insurance QBE Sideways bearish BEARISH Close below $17.70 is very bearish

QR National QRN Sideways bearish AVOID Although down 1.4% still has lots of support at these
levels.

Rio Tinto Ltd RIO Sideways bullish AVOID Yep - definitely not a clear breakout - like BHP its
moving sideways within a “box” pattern.

Suncorp Group SUN Sideways bullish AVOID “I think this is running out of puff” - yep down 1.5%.
Likely to continue this reversal and head down to $8

Tabcorp TAH Sideways bullish AVOID Down 2% but still within a sideways trading channel

Telecom Corp. TEL Sideways bullish AVOID Down 0.5% - short term trend is over - holding
pattern for now.

Telstra TLS Sideways bullish BULLISH “could pullback on profit taking” - or just a broad
selloff like everything else. System still says stay in
and buy on this dip - or take some profit.

Wesfarmers WES Sideways bullish AVOID Down 1.7% but still within a sideways trading channel

Westpac Bank WBC Sideways bearish BEARISH Big drop today - close below $22 would continue this
correction down to $21 at least

Woodside WPL Sideways bearish AVOID down slightly - not as bad as the other resource
stocks - strong support at $44.50

Woolworths WOW Sideways bullish AVOID Down 0.4% and possibly reverting back to sideways
channel again, although inverse H and S is forming.

WorleyParsons WOR Sideways bullish AVOID Bull trap - down 3% - close below $28.50 is very
bearish

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 Monday, 23rd May 2011

Glossary of Terms

Term Description

Bullish Biased towards an uptrend in the stock, either trend continuing or a new trend to develop

Bearish Biased towards a downtrend in a stock, or lack of potential for growth, or to add to a short

Long/Short The buying/selling of a security (or derivative thereof) with expectation it will rise/fall in value

Sideways Usually with a bullish/bearish bias, the stock is consolidating and not moving in a medium
term basis, but may move in between a channel of prices through short term trends.

Hold To maintain the position and examine risk management (e.g tighten stops)

Avoid To avoid a position entirely, but not to stop watching for future potential

Resistance An upper price level that a stock or index can trade to, but not exceed.

Support A lower price level that a stock or index can trade down to, but not drop below.

Momentum The rate of change or acceleration of prices, either upwards or downwards.

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