Vulcan lists on both ASX and NZX on the same day, coincidence?
Printable View
Vulcan lists on both ASX and NZX on the same day, coincidence?
Monthly bull flags have been my favourite swing setup over the past 6-12 months. There have been so many examples of these since the Corona crash and recovery. STU is shaping up as another great flag.
How I look for the Ideal Entry
https://www.tradingview.com/x/ayv0LO4o/
Looking back in July/August, we could see the monthly chart getting toppy, so we knew that monthly consolidation was a likely scenario to play out. The strength of the fundamentals (massive demand exceeding supply, pricing power, business recovery) had me looking for an entry around the monthly 12EMA / $1.00 psychological support area. To trigger an entry I zoom in to the weekly and daily charts.
https://www.tradingview.com/x/aku2bRyk/
On the daily chart I am ideally looking for an entry on RSI oversold. This is a reliable signal for a weekly low being set (the first step of setting a monthly higher low - which is exactly what we're targeting). In this case we had the $1.03 area be tested 5 times, on much lower volume than the drop. These factors provide a basis to begin scaling in an aggressive entry and we now have a stoploss level to work off. A slightly more conservative entry is purchasing on the breakout from that range, which occurred on strong bull volume. A second chance entry was provided with the daily bull flag formation, lining up with the EMA12. A pullback off $1.20 would provide another entry point.
https://www.tradingview.com/x/VmWvBPJO/
The weekly chart is much the same story. Three weekly inside bars, triple bottom, lower volume. All lined up with the inside bars breaking bullish and confirming the weekly low being set. Again, this is an aggressive entry and we are trying to pick the monthly higher low. Its a credible scenario that the weekly downtrend would continue. The most conservative trader is waiting for a weekly trend change to confirm the monthly higher low.
The key with these aggressive entries by trying to pick up near the bottom is that I know a monthly bull flag is a highly likely scenario. Without this long term outlook these entries often wouldn't present favourable risk/reward. With these aggressive entries the risk of failure is much higher, however you dollar risk is low and potential reward is high. It is a good plan to scale out of some of your position coming into resistance to have your position breakeven if your stops get hit (i.e. weekly downtrend continues).
Looking Forward
We have confirmed the monthly higher low in October, now we are looking for the bull flag to confirm by breaking $1.20. Ideally I like to see a weekly trend change to provide a very strong support area and confidence, however in this case the monthly retracement was low (~25%) so this won't always happen.
If we get the bull break then we are looking for resistance areas of $1.30, $1.60 and $1.70 as target areas. Various exit strategies can be used depending on your strategy or timeframe: e.g. weekly EMA12 or downtrend confirmation, monthly EMA12. In my experience, the key thing with monthly bull flag is to be patient and let your profits run given it is a long term pattern.
Disclosure: hold long position.
If STU was priced on similar multiples as Vulcan the share price would be over 2 bucks
Mind you Vulcan has ‘multiplied in size’ over the last seven years ….STU iF21 sales were lower than F15 sales ...... hmmmm .....maybe Vulcan have grown in NZ at the expense of STU (ie taken share off them)
That's past - looking forward to the 2 bucks
Yes will be interesting to see how Vulcan go’s . My broker said the Vulcan sell down was all gone in 3 hours. $2.00 not out of the question. We need some good numbers on Thursday.
Numbers will be good - question of just how good and what is the market expecting.
"The team's at work, the warehouse is full and we're raring to go."
https://blog.steelandtube.co.nz/the-...Page%20Tile%20
Our Steel & Tube teams are all back in action ensuring supply of much needed steel products to our manufacturing, construction, infrastructure and rural customers.
We have inventory available and are ready to support you and your business wherever you are in the country.
And this years EBITDA is going to be what, certainly based on comments that sales 29 percent up before lockdown, I’m very confident that $2 is very realistic. Stu unfortunately missed the boat in Australia but only because of the ownership with one steel who already had a distribution business in Australia . Nothing to stop them now entering the Australian market. Seems very logical given how well Vulcan has done there. What we need first though is to be once again the market leader in NZ.