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Buy in May and stay! – UnumCapital
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Buy in May and stay!

Buy in May and stay!

Apex Trading’s Weekly Bulletin: 10-14 May 2021

“Sell in May and go away”; that’s an old market adage that is based on the historical underperformance of the stock market in the ‘summery’ six-month period commencing in May and ending in October, compared to the ‘wintery’ six-month period from November to April.

Following this strategy would mean selling some or all equity holdings in May, go away, and only ‘re-surface’ in October. 

But If events of the 1st week of May are anything to go by, it certainly seems like this ‘summery’ six months is going to be different. For starters, the slow recovery of the US’s job market (as evidenced by the massive miss on April’s jobs numbers) makes it almost certain more stimuluses will be coming, and that the Fed won’t be stepping off its asset purchase program any time soon (contrary to what the market was beginning to speculate).

Now that’s bullish for Equities, and metals; and bearish for US dollar.

For those who missed the Jobs report on Friday; only 266,000 jobs were added against analysts estimates of 1 million; and the S&P 500 responded by closing last week at an all-time high in anticipation of more brrrrrrr. So instead of selling in May and going away, how about we Buy in May and stay!

#1. Gold (XAUUSD)

We wrote about Gold last week when it was still flagging on the weekly chart. We mentioned how a break out of that bull flag could be the signal we need to take us back above $2,000. Our view hasn’t changed, and we are just going to put the weekly chart here, and let it do the talking.

#2. DAX 30 (DE30)

When the trend is up, it easier to go with it, rather than fighting it. But caution should also be exercised when following trends to make sure not to enter over-extended markets.  We got our chance to ride Germany’s DAX Index last week when price pulled back to its 50-day moving average which has been acting as support, ever since this current trend started.

We have a medium target above 16,000.

#3. NZDUSD

There isn’t much to say here; we already have a ‘Long’ position on this pair which is already in the money. What just caught our attention here is a bullish inverse Head and Shoulder technical formation which is forming on the daily chart, which has a measured target of at least 1.7500.

Now we can’t emphasize enough how we like these kind of bullish set ups that form in an uptrend.

#4. EURUSD

Just as we forecasted last week, the 1.2000 support held. Some resistance around current levels (1.2150/60); but that doesn’t change our view; our medium term target remains 1.2500.

#5. EURAUD

We posted a potential bullish set up on this pair last week. But the price action of last week has made us change our mind (as we often do), and we are now inclined to go with the current (down) trend.

Below is a 4-hourly chart with a pennant technical chart pattern which target 1.5400 and below.

Invest in Apex Trading

Take advantage of these trades by investing in this US denominated Portfolio. At Apex Trading, we are process focused. We understand and appreciate that trading outcomes are random, as such, we focus on our trading processes, and we let the market proves us wrong or right.

And our process; just think of it as climbing a mountain to its apex. We analyse micro and macro fundamentals, we filter using technical analysis, we then identify specific patterns, do proper risk management, then we execute and manage with consistency; in order to get to our Profitable climb!

Talk to us; innocent@unum.co.za; 0113842951.

Until next time, let’s keep it profitable!

Innocent Maponde

Portfolio Manager: Apex Trading

Innocent Maponde

Innocent graduated with a B. Com (Honours) Degree in Banking in 2011, and gained corporate banking experience for about 2 years. His passion for stock markets made him complete the SAIFM ‘JSE registered securities trader’ exam in 2015, before venturing into full time equity trading in 2016 when he joined Unum Capital on their Proprietary Trading desk specializing in CFDs. Innocent believes proper risk management and consistency in executing one’s trading plan, are key to achieving success in the trading business.

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