Trend is your friend .... Long term strategy

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Derek  6 Oct 2017

Morning,

You are all familiar, by now, with the saying: The Trend is Your Friend. I want to show the two extreme trends in markets this morning and see Long Term Strategy below for trending shares.Keep in mind that we use a trend factor of 2 years with the biggest influence of this factor the last 6 months.

International:
All positive and the positive trend remains in place.

I show the S&P500 and notice the strong trend line.



One of the strongest trend shares in the US is Boeing. I show the weekly chart with its trend line.



JSE Technical:
I am sure that most of you thought that Naspers is the JSE's strongest trend share? Wrong! Naspers is only no. 8, but most probably the most stable one.

The strongest trend share in the JSE is Kumba (KIO). After correcting until 2016, as you can see on the weekly chart, it started a strong upwards trend.



The weekest trend share is Sibanye Gold. If you kept it after 2016, you would have lost -78% of its value!



Long Term Strategy:
For a trending share one must ignore all cyclic signals and only concentrate on trend lines. You can also use the EMA8 (orange) line as a trend line. As not to get confused by the daily moves, look at the weekly chart. I show the weekly chart of Naspers with its long term trend lines. Notice how the trend started increasing since beginning of 2017.



If you must use only one technical signal .... it must be a trend line!
You must have a great weekend.
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