Covid-19 remains to be the centre of attention with no significant developments and global reported cases now above 2.65 million. I favour a re-test of the lows witnessed around March 23rd as opposed to a continuation of the failing V-Shaped recovery. The major indices have slipped since our last weekly update. The FTSE has lost -0.4%, the German DAX index -2.1% and the Dow Jones index -3%. We are close to trading back to levels seen two weeks ago. Oil demand has been shattered with US Crude trading just below $8 this Tuesday! Oil was trading around $27 in early April and spent February around $50 level. We have no interest in trading this.
Undoubtedly there are some UK and US equities at hugely discounted levels if you are looking back to the market highs from mid-February. However, there is still too much uncertainty and no positive news flowing. Buying small positions at these levels can work, allowing yourself to add to the position in tranches thereby bringing your average down over time. Once you have identified the lowest level you think a stock will reach, splitting purchases up into 4 staggered buy levels can be a great strategy.
A minority of sectors have actually benefited from Covid-19 and will most likely continue to. Cloud computing, video conferencing, e-commerce, streaming and telecoms all offer opportunities.
A vaccine will be produced at some stage so buying stocks in a few of these could prove very lucrative. Amgen AMGN, Moderna MRNA, Gilead Sciences, GILD, Pfizer PFE, GlaxoSmithKline GSK and Regeneron Pharma. REGN are amongst the 21 companies working in treatment as of last week. Spread Betting companies such as IG Group IGG and Plus500 PLUS have also fared well. We are likely to see increased trading activity despite the volatility markets, considering more of us are at home and future lockdowns are a distinct possibility.
Last week I asked Has Market Volatility Peaked? Volatility has not decreased and currently the CBOE (VIX) is trading at 40. We will re-evaluate the situation at the start of May and should indices continue to display large intraday swings, we will switch to sending day trade signals on major Forex. GBP/USD, EUR/USD, EUR/GBP and USD/JPY are the pairs we will focus on. Daily movements have generally been no more than 1% on these pairs which makes it ideal for our trade setups.
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.