Shifting Shares (4 August 2019) – The Time is Ripe

Shifting Shares (4 August 2019) – The Time is Ripe

4Imprint (FOUR)

This stock literally broke out the day before the results, and on the day of those results gapped up and promptly dumped back down. This is the problem with stocks that make a move before the event, as often it is traders looking to predict results and sell into results (hence buy the rumour, sell the news..).

The results themselves seemed reasonable to me, and the stock has built a low volatility base for several months now. If it takes out the high at around 2990p then that is the stock telling us a move may potentially be starting.

The stock has come a long way since 2009, where it hit a low of 86p. That’s more than a 30 bagger!

Anglo Asian Mining (AAZ)

Here’s another one that has done fantastically well in just a few years. In 2015, AAZ printed a low of 3.25p. It’s now almost 130p!

There could be more to come, too.

 

 
Begbies Traynor (BEG)
Begbies Traynor had an interesting RNS recently.

·      Number of businesses in significant distress now 484,000 – 14% of all economically active UK businesses.

·      Average insolvent company debt increases by 122% in past three years to £66,000

·      Businesses in ‘critical’ financial distress increases 5%

 

They also announced good results, and a placing with a low minimal discount to the stock price. It’s clearly an uptrending stock, and if it breaks out of that recent high I intend to be long. I’m quite bearish and so Begbies capitalising fits my narrative, but ultimately the chart has to decide for me.

Boohoo (BOO)

Boohoo has really taken its time to consolidate. Nearly two years, in fact. If the all time high goes then plenty of people will be there to pile in as that is a clear sign that the stock is now ready to go higher.


Brave Bison
What a crock this has turned out to be. Buried right under the RNS hoping to hide it away, was a profit warning. The problem with small caps is that they can be doing so well then suddenly, out of nowhere, they’re back to being terrible again. I did think this stock had real potential but now it’s clear that it’s an avoid. Unless it gets back to the recent high at 3.5p then there’s little point following it. Bye-bye!


Burford Capital
No room at the inn on the bell this morning when I tried to short with IG and Spreadex. I’d be very careful being long of this stock. It isn’t looking too clever and struggling to put in new highs. There was a big selloff on results day on large volume – that is likely to be institutions exiting.

That said, it’s not on a huge earnings multiple. It’s relatively fairly valued, but are we paid on low earnings multiples or by price?

The stock has now dived through the level and if it takes out the December low then longs will really be in trouble. If you’re an investor, have a strategy. Be prepared. Work out what your drawdown is going to be and then stick to it – don’t adjust stops or not plan. The worst stop loss is the emotional stop loss (you can trust me – I’ve done it).
Cineworld (CINE)
Cineworld looks like a stock that is going down. It’s well off the highs, and I’m now looking for a short entry here. I missed the entry point this morning but 210p is significant support. If that goes, the stock goes lower I believe.

 
Gold
We are seeing a big bowl in gold. It’s taken out multi-year highs. Given the macro environment it shouldn’t be too surprising. I don’t trade commodities but gold going up signifies a flight from equities to the yellow metal. This tells me that if gold is going up then equities may be risk-off.

 
Marks & Spencer (MKS)

I did manage to short MKS this morning. I’ll short more if it takes out the 2008/2009 lows at 183p. This will be very significant, and give me the confidence to scale in a bigger position.

Debenhams was easy to spot. Could this be the same? The difference is that MKS is a £3.6 billion market cap company – but many large companies have declined hugely and gone bust. Looking at the chart, MKS has already lost plenty of value, but in such a terrible sector and such an outdated business I can’t see the bull case here. I’m happy to be wrong though, and the price action will tell me if I am.

 

 

Reach (RCH)

Reach, or the old Trinity Mirror (TMI), is making new highs. I’m long already here and would look for a backtest and then a new breakout. The business is making a switch to digital, and this could be successful. Or it could not. I don’t intend to do much further research as this is a long trade only.

We can see the moving averages now pointing upwards which is a good sign. This could be the beginning of a stage two uptrend.

 

 
Superdry (SDRY)
We are seeing Superdry come back down to test the key level.

Julian Dunkerton narrowly won the battle to come back to the business he founded, but things have changed. He thinks he can change it but the environment is changing. I think Superdry has further to fall – it’s in a tough sector, and I’ll test that opinion when the stock breaks down.

 
Thomas Cook Group (TCG)
What an excellent long trade for those that caught it – 100% up in a few sessions. However, I believe the time is ripe to open a short (and have done so at 11.5p).

If the stock breaks through the level where it continuously fails, then the move could have legs. But this is significant resistance, and the stock itself is garbage equity. So, we’ll see. It’s going to be an interesting few days at least.

 

 

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    Great stuff ……really enjoying your reports.

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