Covid-19 continues to dominate our lives, however is the stock market beginning to price it in? The DOW Jones and German DAX indices are both trading approximately 32% above the lows set in only 7 weeks ago. The FTSE 100 index and DOW Jones index are 24% and 18% away from their all time highs respectively. We favour a continuation of the rally, another large dip and then a stronger recovery. This suggests a W-shaped recovery as opposed to a V-shaped recovery.
During uncertain times, buying small positions at these depressed levels often works, allowing yourself to add to the position thereby bringing your average down over time. Having identified the lowest level you think a stock will reach, splitting purchases up into 4 staggered buy levels can be a great strategy.
Despite not offering any dividend for 2020 we like Lloyds (LLOY) below 33 which is trading 45% lower than pre Covid-19 levels. This is ultimately a value play requiring patience. Hikma Pharmaceuticals (HIK) which closed at 2370 today has recently seen gains from the pandemic. Paying a decent dividend, this sector is likely to witness continued growth as healthcare takes precedence for us all.
Royal Dutch Shell B (RDSB) fell sharply today closing at 1286 and is trading 45% lower than levels traded in January. Although the bottom may not be in for Oil yet, holding this for at least six months should pay off. It also offers a healthy dividend despite the cut announced today. Vodafone (VOD) closed below 113 today and offers an attractive dividend of 5.1%, trading at a 25% discount to pre-covid-19 levels. Continued demand for data, smartphone usage, broadband and their 5G sharing agreement with O2 offers opportunity.
Indices remain highly volatile so as anticipated we will be switching primarily to day trade signals on major forex pairs. GBP/USD, EUR/USD and USD/JPY will be the focus with the occasional trade on less volatile and range bound major indices. Movements on these three pairs have typically been no more than 1% which makes it ideal for our trade setups.
We are currently offering 1 month free for any Trade Signals Service if you commit for at least a quarter. This promotion will expire when lockdown ends! We managed a return of 70% in 2019 for our PREMIUM service using fairly low leverage. Further performance details can be seen here: Annual Return.
Coming Soon: We are in the process of testing various automated day trading funds with our own money.