2020 Trade Ideas Review: What Worked and What Didn't
ALSO: Read about my Sappi Calls: https://re-rate.blogspot.com/2021/01/sappi-long-and-short-of-it.html
Updated with last prices as at 24 December 2020.
The following is a review of the 2020 trade ideas that I have suggested. These were generated in my employment at two South African-based stockbroking firms as well as in the social media sphere where I occasionally share my technical perspective with market participants such as (private) proprietary traders, institutional traders and analysts and portfolio managers.
Trading Desk Analyst (Responsible for 80% of private client research. July 2016 to June 2020).
Investment Strategist (Headhunted to start and take full responsibility for the private client research. These include quarterly reports with the 'best ideas' for the period. July to December 2020).
The ones highlighted below stood out the most, on both the long and short side. This is not a comprehensive view of either the best or the worst, but merely a snapshot of evolving thought process. To manage risk and avoid major losses, I always recommend a stop-loss.
This year we saw many big winners off the March lows, which was a "once-in-a-lifetime opportunity".
For the sake of simplicity, I've added the chart with the entry date and zone.
Please Note: None of these ideas are an invitation to buy or sell and should also not be considered financial advice.
Some of What Didn't Work:
Exxaro Resources (LONG) - recommended entry in the range of 146.00-148.14. Stop-loss Tested.
Aspen Pharmacare (LONG) - this idea was my 2nd attempt to score on the name. My first long was successful however this time it didn't work. Stop-loss Tested.
Nedbank Group (SHORT) - stopped out on short entry - 1 day too early
Vodacom - Buy/Long - Time Exit Applied
BID Corp - stop-loss tested.
Mondi Plc - stop-loss tested
L'Oreal stop-loss tested
Some of What Worked
JSE Top 40 - Short/Sell
On 20 January 2020, I compared the chart structure with that of August 2018 - expecting a 'pop-and-drop'.
JSE Top 40 - Long
On 18-March, during extreme panic panic, I stuck my neck out and communicated the following to clients.
18 March Comment to Clients on the Unum Capital Telegram Platform:
Red = Opportunity. A General Market Comment
A brief thought as things are moving fast.
The period 20-January to present has been extreme with the All Share Index falling by over 20000 points and the Top 40 by 35%.
Various sectors have been decimated:
For one, Platinum & Precious Metals are lower by 61% while Diversified resources are lower by 45%.
At current levels, amidst the carnage, it may be an opportune time to dip one's toe i.e. phase in / rand cost average on a medium to long term portfolio.
I dont know where the exact bottom is however here are a few names that have caught eye, and some which I have been publically bearish on for extended period of time and which has served as a portfolio protection and risk management tool.
Now some of these may be worth phasing into.
IMP now 5200c (bearish since 14600c in Jan-2020)
DSY now 7200c (second target has been reach. Sell call @ 16100c, new bank launch, optimistic valuation)
MTN now 3800c (bearish since 11500c) - Can go to 3300c.
FSR now 3648c (long term sell note at 6677c Nov 2018, it can go to 3200c)
GRT now 1100c can go to 900c (bearish since 2367c)
If you've be waiting for opportunities, these are some which can be considered and could form part of a diversified portfolio.
Please note this is not a comprehensive list since prices are moving quickly and I've had to keep it brief. Please also chat to the rest of the trading desk about additional opportunities.
Please remember
- This is an equity portfolio view, not a trading view
- diversify appropriately
- phase in/rand cost average.
Regards
Lester Davids, Trading Desk Analyst
Aspen Pharmacare: Long 03 September +11% in 3 trading sessions
Long 09 Jan @ $72. All time high of $588.
Peloton Interactive
Long @ $31 April
Peloton Interactive - Follow Up
Roku Inc
Long @ 38.01 on 22 September
Costco Wholesale Corp
Long 04 August
Target Corp
Long 15 July 2020
Uber Technologies
Long 08 October 2020
Twitter Inc (Multi-year view) - Long 23 August 2020
Blue Label Telecoms
Positive Technical Observation Using The Monthly Chart - 19 April at 200c. Price Doubled to 400c by late November.
Fiverr International - Pending Base Breakout Flagged 22 Dec 2019. This share became a 10-bagger in 12 months.
Xilinx Inc
Long Idea on 08 October at $105.90. The followed day, AMD announced that it was to acquire Xilinx.
Nintendo
Nintendo (Follow-Up)
Cyber Security
Invesco Solar ETF (TAN) - Part of Q3 Technical Review
Long at $43.01. Hit All-Time Highs on Friday 18 December ($98.24)
Global X Genomics & Biotech ETF
Long on 08 October at $19.24. Recent Highs of $24.98.
QuantumScape (a SPAC formerly called Kensington Acquisition Corp) +500% to the most recent highs.
Long on 09 October
Global Steel Stocks (Broad Sector Recommendation on 22 October) - Sector ETF +39% to recent highs. Ternium and Arcelor Mittal up between 49 and 65% to their recent highs.
Thematic ETFs/Stocks:
eSports and Video Games
Take Two Interactive:
Nvidia
Alternatives In The Electric Vehicle Revolution:
Southern Copper Corp (EV Supply Chain)
Glencore (EV Supply Chain)
Albermarle (Recommended as part of Q3 client report) - global specialty chemicals company with leading positions in lithium, bromine, refining catalysts and applied surface treatments.
Copper - my technical review encouraged the perspective that the subsequent period would be similar to that of 2001-2003:
Chart on 03 May 2020
Chart at the close of 18 December 2020:
Agricultural Commodities
Archer Daniels Midland (ADM)
Mosaic Co
German Equities: "Europe's Engine Room: The Opportunity In German Equities"
"Taking a worldview, it must pain German equity investors to not have participated in the massive bull run we have seen in global equities over the last decade. Yes, we will acknowledge that the DAX is up over 60% from it's September 2013 breakout but for the last 5 years it's been choppy sideways trading action - the big Covid-19-induced plunge included. At current levels, the DAX finds itself having recovered off the March lows and has made it's way to the top of the 5-year range, looking ready to clear the nearly 34-month overhead resistance at 13500-13700.
Historically, we note that upside breaks of consolidation levels present fresh opportunities to enter longs as a potential new bull leg commences. Back in March 1983 we saw the index break out of a 13-year base which led to a 157% advance. This was followed by a few years of consolidation and gradual upward trend, followed by a another upside break. From March 2000 to September 2013 we saw the price develop a 13-year base which was followed by a breakout. Currently, the breakout is 5-years old and is building to clear resistance and advance within the 19-year upward channel."
Nikkei 225
Mitsubishi Corp
Itochu Corp
Electrocomponents Plc
Dechra Pharmaceuticals
IQE Plc
Global Listed Private Equity Stocks/ETF (14-Dec-2020)
Carlyle Group
PSP ETF
Uranium Sector
ETFs - Over the last 6 months, I have officially recommended 4 ETFs as part of my quarterly report.
Performance has been as follows:
Invesco Solar ETF:
Aberdeen Silver ETF:
Global X Genomics & Biotech ETF
United States Oil ETF
ETH - Follow Up
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