6 months ago, I made a note to myself to check up on a post
(http://is.gd/bFTLWb) that I did on SGP (Supergroup), VLX (Volex) and LAM (Lamprell).
SGP has soared 66% over 6 months to 1154p. I had sold in July at 942p, leaving a 23% gain on the table. I felt that the company was overbought at the time, on account of the share price being way above the 50dma. A better strategy on my part would have been to wait until the shares showed a clearer sign of flagging. SGP still looks stretched compared with the 50dma, but the shares still look in an uptrend. No real pullback looks in sight right now – it’s got some amazing momentum behind it, and looks like it wants to get back to its 2011 high of around £18.
SGP 1154p No holding.
Let us remember that it is dangerous to chase stocks, though. TCG (Thomas Cook) and ITV (ITV) have been great momentum stocks, with an RS6m of 81% and 33% respectively. On 1 August, TCG announced its Q3 results, sending the shares up 4% to 159.7p. On 30 July, ITV announced its half yearly report, sending the shares up 6.3% to 167p. Many momentum stocks have hit air pockets over the last couple of weeks, and the price of TCG is 146.3p, whilst ITV is at 160p. I had Stockopedia Alerts set up to email me when the price of the shares were near their 50dma. They have been triggered recently, so I think that the shares should find support at these levels.
But I have digressed.
VLX was at 112p 6m ago, and I said I was hoping for a quick assault to around 145p.I was way off the mark. The shares have trading doggedly around the 100p mark. They reached 120p last week on the back of chairman Mike McTighe stepping down. They have since dropped back to 108p. Paul Scott recently announced an interest in the shares (http://is.gd/DqTkvJ), and it seems that interest and bullishness is returning to the shares. Trading volumes aren’t that great, though, so maybe the recent moves don’t mean that much. Seems as though I was premature with my call of around 150p, but it looks like that number is still in the running.
VLX 107.5p. No holding
LAM was at 149p 6m ago, and I was anticipating a rise on the back of board changes and general improvement in the fundamentals. I pointed out that there was a gap at 300p that looks like it could be filled. This share looked well on the way to recovery, but it has since had a disappointing run since then. It now stands lower, at 137p. I think it can actually go lower still, as the market must be feeling increasingly edgy about when the results will come out, and what they’ll be like. I think that the results are likely to move the share price dramatically – for good or ill. I think that the market will want to see some quite positive outlook. If the outlook is dull, just the “same-old same-old”, then my suspicion is that the market will get bored with them and dump them. We shall see.
LAM 137p. No holding.
Well, that’s about it for today. I had shown no particular foresight from my blog of 6m ago.
A happy and prosperous investing to you all.