Shifting Shares (23 April 2019) – Sun’s out, shorts out #BOKU #BMN #FRAN
D4T4 announced a slightly ahead statement last week – usually these are received well by the market but instead we saw a slight sell-off. Perhaps this is because traders were hoping for a stronger beat, or perhaps there was something I missed. In any case, I sold down my position on news of the CFO leaving unexpectedly. In my view, this is the start of a new journey for the company, and I can’t understand why she would wish to leave when it could be a great career growth opportunity.
I also didn’t like the fact that management sold down their options. On the other hand, people always have a reason to sell – but nobody is ever forced into buying.
In any case, I have a break of 281p for re-entry. Why risk the stock going against me if I can buy the breakout?
An honourable mention should go to Fastjet (FJET), which today posted a loss of $41.2 million. However, $23.9 million of this was for one-off impairments (so that’s OK then!). Bizarrely, the market cap of this stock is listed at £56.1 million (according to SharePad), for what is a few rubbish airplanes in Africa. I tried to short this a few months ago, but there was no room at the inn. Unless they go on a mega spoofy ramp, I can’t see any upside in this stock whatsoever at this valuation.
Boku Inc (BOKU)
BOKU came onto my watchlist via my volume filter. I’m looking for a break of the recent high with a very tight stop. I don’t know much about the company but @Glasshalfull on Twitter has published some great notes. There may be something in the business and I’d get more interested if it can break through the highs around 150p.
(All charts in this article taken from SharePad)
When stocks rise on increasing volume, it’s a sign of accumulation. Whether that accumulation continues is something we’ll see if the stock either breaks out or is bought on dips.
It has some distance to travel to the all time high, so for now that’s a lot of supply and stale bulls to churn through as it hits their breakeven price (they might’ve been down 40% – but if they sell for ‘breakeven’ they can pat themselves on the back for not taking a loss!).
I love Bushveld, as it’s been very kind to me with the amount of breakout opportunities offered.
Sadly, all non-committal affairs must come to a close, and it looks like my brief dalliances with the lovely Bushveld are over. I liked it when it was going up, but stocks that breach all moving averages to the downside, and start to trend lower (especially on large volume), are stocks I don’t want to date. Call me what you will but downtrending stocks lose money unless you short them – which is exactly what I’ll look to do if we see a test of the 200 EMA and MA moving averages.
Word is that the price of Ferrovanadium has come crashing down, and this is reflected in the price. I don’t intend to spend any more time researching this other than looking at the chart, but for those who do I would recommend listening to Joel’s podcast on Cube here.
TUNE is something of a bogey stock for me, I think I’ve traded the breakout several times now and lost money on it each time. Let’s look at the chart:
Those 200-day moving averages are looking precarious indeed. I’d be tempted with a short on a breakdown here – the stock has continuously failed to break higher. And if it can’t go up, it can either go sideways or go down!
Franchise Brands (FRAN)
I have traded this in the past but it remains illiquid, so it’s never a good idea to stick around for too long or hold plenty. It is now back on the watchlist after their appearance at the UK Investor Show and today’s statement.
I’ve never heard of any of the brands, but then I spent several years living outside of the UK and so never looked out for them. Growth looks quite exciting, and the recent strategy seems to be to centralise operations and offer more autonomy to the franchisees. This sounds good in theory, as those who run the businesses are likely to act in their own interests (and therefore in FRAN’s too), but as always the story can be great and the reality very different.
The all time high was 100p, and if it can break that, then we’re in blue sky territory.
Volumes are on the move recently, so we could see it get there. I’ll be long if it does. It’s worth checking out the director buying here, as one NED in particular seems hell-bent on a large holding. There is also a share buy-back, which can provide a bid for liquidity.
JKX Oil & Gas
This is another stock that loves a good breakout, and I’m hoping we’ll get another bite of the apple at 65p.
A Ukrainian comedian won the presidency over the weekend, who was backed heavily by a large shareholder in JKX. I wouldn’t read too much into this, but it can’t be bad news for shareholders!
Scientific Digital Imaging (SDI)
SDI is testing recent and all time highs, and I’d like to see volatility and volume drop off to consolidate before an extended move.
Please feel free to post your thoughts in the comments!