Initial BUY Signal issued

STRONG Intial BUY Signal (IBS) shown on charts.

An Initial Buy Signal (IBS) manifested on 28 August (2596 cents) when the price broke through both the EMA20 and the medium-term resistance trendline formed since May, for 2 consecutive bars.

We have been watching the share with interest since the short-term bull run began on 5th August and it seems the 3-month bear run initiated on 26 May is finally coming to an end.



We are looking for a 1st confirmation signal when the price remains above the EMA20 and resistance line for another 2 consecutive bars. Our 2nd confirmation will be 2 trading bars above the SMA50 or when the EMA20 crosses the SMA50.

You should get ready to buy your first tranch of shares now (see Trading Strategy) as the share is likely to take a breather on Monday (US and UK markets closed) and you could pick it up for R25.30-R25.50 once we issue a 1st confirmation.

The shortest bullish period we have measured on STX40 with our system in the last 6 years is 100 days so hopefully this run will be at least that. We expect a target of R30.00 for this bull period.

About the STX40 Share

Our previous post explained how ETF's were the best way for private investors to get into the stock market. The returns are good, the costs are low and so are the risks.

The STX40 is the most successful ETF in SA, and if you buy your shares through http://www.satrix.co.za/ you only pay 0.1% brokerage (versus 0.6-0.8% for standard brokers or online share trading portals) and the annual administration costs are 0.8% (a fraction of what fund administrators charge you). This blog is about how to make relatively risk-free money from the STX40 using a system we have devised together with very expensive technical analysis software to trigger BUY and SELL signals. As such we are not here to provide details on the STX40 share and for more information on SATRIX40 go to their website.

Note that neither this blog nor anyone working on Satrix40 Trader is in any way associated with the STX40 fund administrators.

How has the STX40 fared since its inception 6 years ago? Have a look at the chart below:

You can see that the STX40 is a pretty safe investment. If you bought 6 years ago you would have more than tripled your money. Not earth shattering like some JSE urban legends you hear of but given how safe this investment is and how low the costs of administration are, you would have done pretty well. The green and red arrows show where our system triggered BUY and SELL (Entry and Exit) signals that allowed you to enjoy the growth phases and have your cash sitting earning interest during the bearish periods. Using our system you would have averaged 50% growth of your original investment per annum!

About Satrix40 Trader

This blog is all about getting the uneducated investor involved in the stock market using the SATRIX-40 (JSE:STX40) Exchange Traded Fund (ETF). An ETF is basically a index-tracking fund and the STX40 tracks the JSE Top-40 Stocks.

Warren Buffet recommends ETF's for the beginner investor as over time, individuals picking their own stocks or using expensive fund administrators to manage active funds such as Unit Trusts etc. struggle to outperform the indices. It is the easiest, lowest risk route to planning for your retirement or building up a nest egg by investing in the stock exchange. I wish I knew what I know now, 10 years ago! But in May 2006 I took the plunge and my initial R100,000 is now worth R245,000, and using the system I perfected, I never had more than 2% of my capital at risk! Now one important thing before we move on - I am not charging for this system or information provided on this blog, I want to get thousands of more private investors into the game, as the more liquid this stock is the better returns my system will deliver!

We publish this blog as we are a fan of the SATRIX40, and have devised a 98% accurate system to trigger BUY and SELL signals to allow you to get in when the price is low and sell when the price is high. If you bought STX40 on 10 May 2005 and forgot about them for 1,200 days (a traditional buy-and-hold strategy) and suddenly today you wanted to sell them, they would have shown 105% growth. Not so bad you say! But if you used our system, and bought/sold on the 6 signals our system generated (3 sets of entry/exits) your investment would have grown 145% and you would have been exposed to far less risk than the buy-and-hold strategy.