Shifting Shares (30 Dec 2019) – The closing curtain

Shifting Shares (30 Dec 2019) – The closing curtain

I hope everyone had a great Christmas! As we head into 2020, I’ll be reviewing my trades and how I can improve.

In fact, I’d recommend everyone printing off their trades and getting a highlighter, spending a bit of time working out what went wrong and what went good. You may be surprised at what you find.

I find this a really helpful activity. There is a wealth of data just waiting to be mined and exploited for gain, but very few people will actually do this. But then very few traders actually make money… maybe there’s a correlation?

In any case, one of the things that I’ve learned is that my manual override has stopped me from booking more gains this year. Not buying a breakout because the spread was too wide and manually deeming it too risky has seen me miss out on cracking trades that were mentioned in this column, such as SGZ and GOOD. So, a greater discipline with my rules will be my focus next year.

This will also be the last Shifting Shares column. I’ll still be an occasional Cubist (so long as the boss will have me!), but the weekly column will finish now.

There are several reasons for this: I have neglected my own website, and I am starting to trade breakouts less and less, with a focus on news based trades, and scalps both long and short. This means there is little value telling everybody which trades I’ve made this week, because it’s not actionable anymore and in the past – and I have found it increasingly difficult to find future trades to talk about.

I hope you have been able to make a bit of cash reading this column and placing your own trades. I certainly don’t get them all right but that is why risk management is so important. Breakouts work, and so as long as they work, they are tradable.

GAN plc (GAN)

This one was mentioned a few weeks back at the 160p level – well, that level has been broken, and I am long.

(All charts taken from SharePad.)

I’m excited by GAN – even if I get stopped out here I am going to try and get back on the horse. There has been clear volume behind the move which is accumulation, and whilst the stock is overvalued on all metrics, since when has that ever mattered? Stocks move because people buy them, overvalued or not.

Touchstone Exploration (TXP)

This is a stock I scalped on the news of its oil discovery, and since then there has been another RNS which said those magical words “.. that greatly exceeded the Company’s expectations“.

I haven’t touched the stock since the day of the significant oil discovery, but the chart looks like it wants to push higher.

Volumes are coming down, but they’re still higher than the average before the RNS. That’s important. If the volumes keep up, and the stock breaks out of the recent high – I’d be tempted to go long.

Ten Entertainment Group (TENG)

This is a stock that I bought the breakout on, then was stopped out close to the lows, only for the stock to rebound. Typical! Well, that’s life. What should I do – not place a stop next time? No thanks.

Getting stopped out is an occupational hazard which keeps losses capped. As Mark Minervini says: those who trade without stops eventually stop trading.

Anyway, the chart has snapped back up to near the high. So I’d be interested in buying this again on a breakout.

It’s up almost 100% in eight months. That’s a lot, but it doesn’t mean it can’t go higher. There is no limit as to how high a stock can go, and calling tops is a fools game.

Ultimate Products Group (UPGS)

Ultimate Products is threatening to break out of new highs.

But that depends which highs you’re looking at. The 90p level was smashed, quickly running up to 100p, only to gap down for an unknown reason (no RNS) and get bought back up again.

This looks like a good retest of the initial breakout. So eyes are on the level for a break of that new high.

Petropavlosk (POG)

Petropavlosk is a gold mining company that operates in Russia.. and if we ignore those big red flags right there and look at the chart, well, it looks brilliant.

This is clearly an uptrending stock (for now – trends can always change). We can see that buying breakouts of the two bases POG has set has been a good strategy.

So, will the stock set a new base? Either way, I’ve put an alert for that high.

This is a liquid stock, and so I’m happy to take a position it it, because I can always get out pretty easily if it goes wrong.

Restaurant Group (RTN)

I like Restaurant Group – probably because I’ve done well on it in the past, and I like an occasional Chiquito. I really like Wagamama too, though RTN shareholders didn’t like the acquisition at the time – sending the share price plummeting.

Wagamama is a good brand, and there was a risk that Restaurant Group would create an endless supply of discounts for this chain as they’ve done with all their others. They haven’t done so, as I’ve had to pay full price, which is good for shareholders.

It popped up on my radar recently as it’s made a 52 week high.

We can see the collapse in the share price in November 2018, when the acquisition was announced. However, the moving averages are mostly now trending upwards, and the price is above all of them.

I don’t have a fundamental opinion on Restaurant Group – it’s supposed to be turning around but whether it is or not is a different story – but I do like the chart here.

Rank Group (RNK)

Another stock that is also showing signs of a turnaround in price is Rank.

The price is almost 100% off the low, which tells me that the bottom has been put in. It’s bowling up nicely too.

Volume has been good too, but I can see there being some serious resistance at 300p. I’ve got my alerts in for that level, and so if it gets there then that could be a good trade.

The closing curtain

It would be nice to have a cool closing statement, like Steve Jobs did in his 2005 commencement to Stanford, but nothing comes to mind.

If what you’re doing works – keep doing it. If it’s not – and you keep doing it – well, I don’t think I have to say anything else.

Thank you for reading, and let’s have a great 2020!

 

Editor’s Note: Many thanks to Michael for his fine contributions this year.

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damiancannon
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Thanks for another great article Michael. It’s a real shame that you’re going to stop doing them as I’ve learnt an awful lot from your examples over the past year. What I would say is that I see value in writing about trades that you’ve done (following a different style) even if the opportunity that you saw is no longer available. For me it’s about learning profitable signals for future use rather than merely aping the trades that you’re doing. So if you’re minded to reconsider your decision I’d certainly be pleased to see some more articles from you in… Read more »

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