UK Stocks - Watchlist and Discussion
#9
Below is First Group (FGP.L).

This is one which I believe is leaving a shortish Stage 1 and could be entering a Stage 2.

[Image: FirstGroup-20140107.jpg]

There are some caveats here as this thing has has false dawns before, but that are what stop losses are for. I has, I believe been in Stage 1 since about May this year after it landed with yet another thump down a long and horrible Stage 4 run which has three downward gaps on this part of the chart alone.

The thing has been trading in the 100-120 range for about nine months and I do think that this may be an early Stage 2 breakout but, of course, history has shown that breakouts in FirstGroup tend to be rewarded with a thunderbolt from on high blasting the stock to even lower depths.

This is, I believe, a potential place to get in and, if so, keep the stops at around 110 or so.

- Malc
Pam: "I wonder what my name means in Welsh"
Nessa: "Why?"
Reply
#10
Below is First Group (FGP.L).

This is one which I believe is leaving a shortish Stage 1 and could be entering a Stage 2.

[Image: FirstGroup-20140107.jpg]

There are some caveats here as this thing has has false dawns before, but that are what stop losses are for. I has, I believe been in Stage 1 since about May this year after it landed with yet another thump down a long and horrible Stage 4 run which has three downward gaps on this part of the chart alone.

The thing has been trading in the 100-120 range for about nine months and I do think that this may be an early Stage 2 breakout but, of course, history has shown that breakouts in FirstGroup tend to be rewarded with a thunderbolt from on high blasting the stock to even lower depths.

This is, I believe, a potential place to get in and, if so, keep the stops at around 110 or so.

- Malc
Pam: "I wonder what my name means in Welsh"
Nessa: "Why?"
Reply
#11
(01-07-2014, 08:37 PM)MalcolmSm1th Wrote: Below is First Group (FGP.L).

This is one which I believe is leaving a shortish Stage 1 and could be entering a Stage 2.

There are some caveats here as this thing has has false dawns before, but that are what stop losses are for. I has, I believe been in Stage 1 since about May this year after it landed with yet another thump down a long and horrible Stage 4 run which has three downward gaps on this part of the chart alone.

The thing has been trading in the 100-120 range for about nine months and I do think that this may be an early Stage 2 breakout but, of course, history has shown that breakouts in FirstGroup tend to be rewarded with a thunderbolt from on high blasting the stock to even lower depths.

This is, I believe, a potential place to get in and, if so, keep the stops at around 110 or so.

- Malc

Hi Malc, that's a good initial Stage Analysis of FGP.L. However, there a few points that you need to consider that could affect it's Stage 2A breakout. Here's the checklist for an investor position from the first post:
  1. Price Action - price above a flattening or rising 30 week moving average
  2. Relative Performance - strengthening and above the Mansfield Zero Line (Relative Performance 52 week MA)
  3. Volume - ideally two times the the four week average or greater on the Stage 2A breakout week
  4. Support / Resistance - little or no heavy near term resistance.
So, the best thing imo is to go through these points with each stock and make sure it has at least 3 of the 4, but ideally 4 out 4 of these requirements. As that will stop the vast majority of false breakouts and breakouts that are too early and will need many months or longer to move into their advancing phase. So lets look at FGP.L, firstly price is above rising 30 week moving average, but volume on the breakout was less than average, and relative performance although improving, is still below a declining zero line. Finally, I've overlaid the Ichimoku cloud on the weekly chart to give a visual guide of potential resistance, of which you can see it's below a quite heavy near term cloud, which is the overhang from the 2012 range. And so it only scores one out of four of the requirements for an A+ candidate and hence needs more time to develop imo, which doesn't mean it won't go higher, but just that it has a number of headwinds and so you need to consider the opportunity cost of buying it.

So I'd recommend from my experience with the method that you should always check against the four main requirements, as it will help you avoid the majority of false breakouts and stocks that need more time to base.


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isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
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#12
(01-07-2014, 08:37 PM)MalcolmSm1th Wrote: Below is First Group (FGP.L).

This is one which I believe is leaving a shortish Stage 1 and could be entering a Stage 2.

There are some caveats here as this thing has has false dawns before, but that are what stop losses are for. I has, I believe been in Stage 1 since about May this year after it landed with yet another thump down a long and horrible Stage 4 run which has three downward gaps on this part of the chart alone.

The thing has been trading in the 100-120 range for about nine months and I do think that this may be an early Stage 2 breakout but, of course, history has shown that breakouts in FirstGroup tend to be rewarded with a thunderbolt from on high blasting the stock to even lower depths.

This is, I believe, a potential place to get in and, if so, keep the stops at around 110 or so.

- Malc

Hi Malc, that's a good initial Stage Analysis of FGP.L. However, there a few points that you need to consider that could affect it's Stage 2A breakout. Here's the checklist for an investor position from the first post:
  1. Price Action - price above a flattening or rising 30 week moving average
  2. Relative Performance - strengthening and above the Mansfield Zero Line (Relative Performance 52 week MA)
  3. Volume - ideally two times the the four week average or greater on the Stage 2A breakout week
  4. Support / Resistance - little or no heavy near term resistance.
So, the best thing imo is to go through these points with each stock and make sure it has at least 3 of the 4, but ideally 4 out 4 of these requirements. As that will stop the vast majority of false breakouts and breakouts that are too early and will need many months or longer to move into their advancing phase. So lets look at FGP.L, firstly price is above rising 30 week moving average, but volume on the breakout was less than average, and relative performance although improving, is still below a declining zero line. Finally, I've overlaid the Ichimoku cloud on the weekly chart to give a visual guide of potential resistance, of which you can see it's below a quite heavy near term cloud, which is the overhang from the 2012 range. And so it only scores one out of four of the requirements for an A+ candidate and hence needs more time to develop imo, which doesn't mean it won't go higher, but just that it has a number of headwinds and so you need to consider the opportunity cost of buying it.

So I'd recommend from my experience with the method that you should always check against the four main requirements, as it will help you avoid the majority of false breakouts and stocks that need more time to base.


Attached Files Thumbnail(s)
   
isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
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#13
An index chart that hasn't been shown before on the site is the FTSE AIM All Share index - AXX, but I thought it would be interesting as it shows that UK micro caps in the AIM market have been outperforming since the late summer when they broke out into Stage 2A, and over the last few weeks cleared the early 2012 highs and broke above the relative performance zero line versus the S&P 500 and so are also outperforming the US market now as well as strongly outperforming the FTSE 100. And hence UK investors and traders should be looking in the AIM market for Stage 2 opportunities as the AIM is now in a confirmed Stage 2 advancing phase after a few years of recovery from the Stage 4 downturn in the summer of 2011.

The AIM in the early phase of Stage 2 is in a completely different phase to the FTSE 100 which has been in a Stage 3 consolidation over half a year and the US markets which are in late Stage 2B. And so there should be lots of early Stage 2 opportunities to find in the individual stocks, some of which we have already found in the watchlist threads over the last few months. Attached is the charts.

P.S. The Government plans to remove 0.5 per cent stamp duty on AIM share purchases from April, giving investors an extra incentive to buy them over FTSE 350 stocks.


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isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
Reply
#14
An index chart that hasn't been shown before on the site is the FTSE AIM All Share index - AXX, but I thought it would be interesting as it shows that UK micro caps in the AIM market have been outperforming since the late summer when they broke out into Stage 2A, and over the last few weeks cleared the early 2012 highs and broke above the relative performance zero line versus the S&P 500 and so are also outperforming the US market now as well as strongly outperforming the FTSE 100. And hence UK investors and traders should be looking in the AIM market for Stage 2 opportunities as the AIM is now in a confirmed Stage 2 advancing phase after a few years of recovery from the Stage 4 downturn in the summer of 2011.

The AIM in the early phase of Stage 2 is in a completely different phase to the FTSE 100 which has been in a Stage 3 consolidation over half a year and the US markets which are in late Stage 2B. And so there should be lots of early Stage 2 opportunities to find in the individual stocks, some of which we have already found in the watchlist threads over the last few months. Attached is the charts.

P.S. The Government plans to remove 0.5 per cent stamp duty on AIM share purchases from April, giving investors an extra incentive to buy them over FTSE 350 stocks.


Attached Files Thumbnail(s)
       
isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
Reply
#15
Thanks for the feedback on FIRST GROUP (FGP.L).

I have read with great interest, here and elsewhere, your comments and thoughts on the LSE volume reporting. I have to admit to having a slightly different viewpoint to you on the reliability on volume. I get the impression that you take the London volume figures with a small amount of trust. I look at them as a complete and utter work of fiction.

I see stocks with volume charts all gear up to about five times the normal volume after running at a certain range of volume for years and then it jumps up to a higher gear of reporting.

I only have the volume histogram on my charts because they look pretty and it prevents people asking "where's the volume?" and the other reason is that, one day, I may actually note that they reflect real-life.

The 2012 range. I have been looking at that and even if it does get there and stops then that would be nice 25% into the kitty. This stock does have an interesting characteristic; everytime the thing shows strength it collapses.

I am still considering this one and I note that this morning it's moved down a little. So it will be interesting to see what it does overtime; will it hit the MA and bounce or will it run true to form and dive like a Manchester United player?
Pam: "I wonder what my name means in Welsh"
Nessa: "Why?"
Reply
#16
Thanks for the feedback on FIRST GROUP (FGP.L).

I have read with great interest, here and elsewhere, your comments and thoughts on the LSE volume reporting. I have to admit to having a slightly different viewpoint to you on the reliability on volume. I get the impression that you take the London volume figures with a small amount of trust. I look at them as a complete and utter work of fiction.

I see stocks with volume charts all gear up to about five times the normal volume after running at a certain range of volume for years and then it jumps up to a higher gear of reporting.

I only have the volume histogram on my charts because they look pretty and it prevents people asking "where's the volume?" and the other reason is that, one day, I may actually note that they reflect real-life.

The 2012 range. I have been looking at that and even if it does get there and stops then that would be nice 25% into the kitty. This stock does have an interesting characteristic; everytime the thing shows strength it collapses.

I am still considering this one and I note that this morning it's moved down a little. So it will be interesting to see what it does overtime; will it hit the MA and bounce or will it run true to form and dive like a Manchester United player?
Pam: "I wonder what my name means in Welsh"
Nessa: "Why?"
Reply


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