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The week beginning Monday, the 14^th November is Week 46 as per ISO numbering convention of the weeks of a year.

Country in focus:

This week we look at the Stocks from AUSTRALIA in ASX 300 index.

Stock/ETF in focus:

Specific Stock in focus is Sims Limited (Ticker: SGM). The Stock is listed in Australian Stock Exchange (ASX), the trading currency is Australian Dollars or AUD.

Trade Direction:

BULLISH, Volume Spike study since beginning of 2019 reveal 100% probability of success in a BUY (LONG) trade. Please note that probability is not certainty, so always trade with complete discipline of risk management and that there is a plan if trade does not playout as anticipated.

Most Recent Event:

Most recent Volume spike event was on Tuesday, the 8^th November. Usually, the trade is opened on the day after the Volume Spike event, or Thursday, the 10^th November. But, since this blog is being written over the weekend, the preferred trade opening is the next market open day on Monday, the 14^th November.

Overview:

Sims Limited engages in buying, processing, and selling ferrous and non-ferrous recycled metals in Australia, Bangladesh, China, Turkey, the United States, and internationally. Sims Limited was founded in 1917 and is headquartered in Mascot, Australia.

The company operates through six segments: North America Metals, Investment in SA Recycling, Australia/New Zealand Metals, UK Metals, Global Trading, and Sims Lifecycle Services. It is involved in the collection, processing, and trading of iron and steel secondary raw materials; and other metal alloys and residues, principally aluminium, lead, copper, zinc, and nickel bearing materials. The company also engages in the provision of environmentally responsible solutions for the disposal of post-consumer electronic products, such as information technology assets recycled for commercial customers; and environmentally responsible recycling of negative value materials, including electrical and electronic equipment. In addition, it provides secondary processing and other services comprising recycling of municipal kerbside materials, stevedoring, and other sources of service.

(Courtesy: Yahoo Finance)

Sector and Industry Details:

Sector(s):                              Basic Materials

Industry:                               Steel

Full Time Employees:        4,071

(Courtesy: Yahoo Finance)

Fundamentals:

52 Week Range       10.97 - 22.80

Avg. Volume             801,695

Market Cap              2.389B

PE Ratio (TTM)        4.18

EPS (TTM)                 2.96

Earnings Date          Aug 15, 2022

Ex-Dividend Date    Oct 04, 2022

(Courtesy: Yahoo Finance)

Current trading price:

As of Tuesday, the 8^th November 2022, or the day the Volume Spike event took place, the stock closed at 11.55. The size of the Volume Spike was 3.97X of the average volume. The last closing price on Friday, the 11^th November was 12.37.

VOLUME SPIKE EVENT:

The Stock was Bullish 100% of the time following Volume Spike events since the beginning of 2019. Here is the key Volume Spike event performance of the Stock:

Summary report: Since beginning of 2019, there were 3 Volume Spike events, of which one event is yet to be traded, that is the current Bullish trading opportunity being discussed in this blogpost. These leaves 2 completed trades using Volume Spike trading strategy, of which both were winners (and hence 100% confidence or Probability) with average move up (AMU) of 22.93% and average move down (AMD) of 2.35% for an average holding time (ADH) of about 57 days.

Historical RRR in those completed trades was an extraordinary 8.56:1. Please note that RRR shown here is a worst-case scenario, as many trades could be closed sooner with higher profit compared to trades closed at the end of 9-week period.

Detailed Report, Trade Performance: If 1,000 stocks were bought following those Volume Spike events, then a trader would have had a Gross Profit of $6,590, Gross Loss of $0, making a Total Net Profit of $6,590. In those closed trades, the Largest Win was $4,790, there were no losses and hence, the Largest Loss is $0, the Average profit/trade being $2,200. All figures above are in AUD.

The Profit Factor (which is quotient of Gross Profit and Gross Loss) in those trades was Infinity.

Detailed Report, Trade by Trade Performance: Results of each trade taken following the Volume Spike events since the beginning of 2019 are as shown in the table below. As can been seen in the table, 2 out of 2 trades were winners. These tables are from the Detailed report of the Volume Spike trading app.

Histogram Chart: The chart below shows the percentage moves of the underlying Stock of Interest following each Volume Spike event for the period of analysis mentioned earlier, for a quick visual clue of the trade-by-trade performance.

Candlestick Chart: The candlestick chart of the underlying Stock/ETF’s latest performance is as shown below. In the web-based Volume Spike trading app, the chart is available for all the Volume Spike events since the year in the “Data since” in the input filter page.

Trade Structure:

We would trade the Stock as CFD trade, structured as follows.

All P&L in the table above are exclusive of commissions or CFD interest paid.

The choice of RRR of 5:1 is historically consistent with the averages of the 2 trades placed since 2019 using the Volume Spike strategy.

Further Information about trading applications:

Please visit the following URL for more information on various trading applications from Sapphire Capitals which are designed to deliver high probability trading opportunities for swing trading as well as for intraday trading:

https://www.sapphirecapitals.com/pages/swing-trading-stock-seasonality-strategy/

https://www.sapphirecapitals.com/pages/swing-trading-stock-price-action-strategy/

https://www.sapphirecapitals.com/pages/swing-trading-volume-spike-stock-trading-strategy/

https://www.sapphirecapitals.com/pages/day-trading-intraday-seasonality-trading/

Disclaimer:

Sapphire Private Assets (ABN: 34 613 892 023, trading as Sapphire Capitals) is not a broker or a financial adviser but an education and research organisation; we provide training and tools for traders and DIY fund managers for trading in global financial markets. The contents of the blog have been produced by using technical analysis and trading applications developed by Sapphire Capitals for the Stock and ETF traded worldwide. The contents of this blog are intended for education and research purposes only and is not a recommendation or solicitation to invest in any Stock or ETF.

For more details, please visit www.sapphirecapitals.com/Disclaimer.