Thorntons (TIDM code: (THT) provided a good example of a price recovery..
..between January 2012 and April 2012 after a profit warning RNS was issued in December 2011. I have been watching THT for a few years but at the heady heights of 80p+ I just didn't feel it was a 'must have' share. Here are my observations....
1. Major volume at 10p level mid-January 2012, suggestive of support and given the net asset value from previous results came in at 30p, it looked like remarkable value at 10p. THT only appeared on my watch list after it was falling from the 10p to 18p rise at the end of January.
2. The 10p to 18p rise during January upturned the hourly Coppock curve which had gone negative - a technical buy signal.
3. Daily middle Bollinger support (20 period) found at the end of January before a continued rise to 26.75p on 17 February 2012 when the daily slow stochastic oscillator became very overbought.
4. Daily slow stochastic oscillator became oversold around 8-9 March 2012 at 20p.
5. Daily slow stochastic oscillator went overbought again on 3 April 2012 at 32p.
6. Bearish divergence signal presented for both ultimate oscillator and volume between the price peaks of 17 February 2012 and 3 April 2012 (higher price highs versus lower indicator highs) coinciding with the weekly slow stochastic oscillator being very overbought at the April price peak.
This was the first time I had ever invested in THT - I missed the 10p opportunity but entered after the hourly Coppock signal presented at 15p (at the end of January) and then sliced profits at stages up to the February price peak, then bought some more when it went oversold at 20p in March, before clawing back the remainder of the initial capital to leave the 'free' holding in for the long term when the price closed in on the net asset value of 30p.
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