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As we all know, stock markets are under pressure and traders are happy to remain risk off until the global macro picture becomes clearer. Inflation concerns are keeping traders out of the major indexes and seeing investors sell down share portfolios. This is showing up in the number of trading opportunities on the ASX with most of the technical price action pictures looking very shaky or moving lower.
I personally like to look for shares on the ASX that have a Market Cap between $300M and up to $10B…mainly the lower end of the scale. I believe this is the sweet spot for the best risk reward from a momentum and technical trading perspective. Too low and you are trading purely fundamental (and run the risk of pump and dumps) while too high and you are basically trading the ASX200 Index.
Below are three Shares on the ASX that fall within my criteria and have nice price action to keep on the radar. They are not extended, have contracted lower off highs and still showing signs of demand.
For now, the risk remains down but if markets do bounce I want to be watching shares that have potential to expend higher. If markets are to continue lower, I want to steer clear of extended shares as they have the furthest to fall.
Hope you enjoy!!
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Disclaimer: the contents of this post are presented for informational purposes only. They should not be viewed as investment advice, nor a solicitation to buy or sell any financial securities. Investments in financial products are subject to market risk. Some financial products, such as currency exchange, futures, contracts for difference, options and warrants are highly speculative and any investment should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. Trading currency exchange, futures, contracts for difference, stocks, shares, options and warrants on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in currency exchange, futures, contracts for difference, options, stocks, shares and warrants you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with currency exchange, futures, contracts for difference, options, stocks, shares and warrants trading, and seek advice from an independent financial advisor if you have any doubts.