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Sorry things aren't going well for you Gioviano and Retire.
It's not great to see the price drop back into the downward trend https://invst.ly/130-i7
Which is why I posted about the difficulty of arriving at a realistic valuation of OCDO.
There are a range of views expressed on this board - some obvious rampers and de-rampers along with more genuine investors, some overoptimistic and some more cautious . I moved into the latter category when I first exited at around 960p in August and am glad I jumped out again more recently.
I 'm still interested but my target entry point would upset people if I stated it. I do find that Valueplay's posts, which are invariably supported by facts/evidence provide a useful balance to some of the enthusiasm. I think OCDO could yet prove to be a good LT investment but in the short term I see it as a pure trading stock.
Yes indeed, dananzi. I added. Let's hope the blue line holds:
https://invst.ly/130-6f
Regarding 'Speculation on $110 a barrel but no conviction on this from the majority of analysts' , GfG, It's interesting that higher OP - and even the maintenance of its present level - currently seems dependant on global conflicts of one form or another. Absent these circumstances, if the supply and demand equation was operating naturally in a stable global trading environment, it does appear that US Shale production would again be driving OP down and that KSA, as head of the unruly OPEC cartel, would yet again be engaging in a battle to maintain market share. Over the last decade this has inevitably driven OP down to unsustainably low levels causing the boom & bust cycles in the US. The difference this time, however, might be the fact that the debt-laden shale producers, that had to pump ever more to survive as OP fell, have largely been eliminated - so OP might simply fall to a lower compromise between OPEC and US Shale, which I guess might be around $60.
The market doesn’t seem to know how to value OCDO - after 20 odd years developing the business and associated technology and 13 and a half years on the stock market. it has never yet, to my knowledge (DYOR), paid a dividend - is there any sign of it doing so? So capital gain is the only reason for buying the shares yet it’s still about 50% above the Exane and Barclays analyst targets of Sept/Oct . It’ll be interesting to see if those assessments get revised this year after the FY results for the whole group -not just retail - are published on 29th Feb.
Meanwhile it‘s worth reflecting on whether OCDO has moved on significantly since this article appeared in The Grocer last June, when Exane had uprated it from ‘underperform’ to ‘neutral’ at 365p: https://www.thegrocer.co.uk/finance/ocado-gets-vote-of-confidence-with-much-better-outlook/680318.article
These points, amongst others, were raised in it: Ocado “still has a lot of proving to do”, noting questions around its ability to move into non-grocery automation, whether partners will order sufficient capacity to reach break-even and how to refinance its debt due in 2025 and 2026.
Since late September the red trend here has kept a lid on OP:
https://invst.ly/12-stx
In December OP punctured the blue trend that has marked the bottom for Brent for nearly three years, with green marking the recovery path. However, the pressure remains whilst red remains unbroken. Which trend will prevail? We’ll know by February.
Yes indeed GaFG: the net effect has been for OP to return to within $0.5 of last Friday’s LSEx close, at $78.5. The Oil Co sp’s, however, take a more cautious track and usually smooth out the volatility tending to drop quickly and recover more slowly. So this week’s summary chart looks like this: https://invst.ly/12-805
I did add during yesterday’s lows and am now ‘overweight’ in Shel but at a very healthy net cost per share given my trades. I will add more if the opportunity looks right. https://invst.ly/12-88z
Yes indeed StockNor - I am not a shorter and buy shares to keep long/medium term or to trade quickly if the gain justifies it. However, I always take note of shorting activity and, if detected, will use the patterns it creates to inform my decisions . I am constantly surprised at how LTH's who post on LSE seem not to grasp how professional shorters operate and that an increase in sp is not necessarily bad news for them- after all, institutional shorters obviously buy back at lows and profit quite handsomely if the price rises sufficiently for them to 'rinse and repeat' the process multiple times. On a commercial scale they rarely come unstuck and I don't bet against them, nor do I resent the activity: for me it sorts out inflated sp's and generates better prices.
Whatever triggered it - it.s back into the wilderness and rejoining the downward slope: https://invst.ly/12zza7
It's 'wait and see' time. Gap filled so one risk gone, next week's update is the next box to tick for me, Gioviano.
610, 550 and 500 look like the next obvious steps down - but your 520 is on the green trend here:
https://invst.ly/12zyvr
I still think it's overpriced but the market clearly thinks otherwise - that's why I'm keen to see reaction to the update before deciding on reentry.
Good advice from Mary here:
‘Anyone who buys on the basis of an LSE post or sells on a similar basis really should not be investing’.
Investment decisions should be made on the basis of facts, realistic assessments and balanced judgement - not emotion, unfounded belief or faith. PFC may ultimately be worth more than the current market valuation or it may be worth less - LTH’s should not dismiss cogent comments from shorters and vice-versa. The rest is just noise.
Professional shorters seek out stocks that appear to be over-priced on the basis of fundamentals and drive the price down. The fact that this can be painful for LTH’s does not make the shorters wrong. In any case, the ‘villain’ in this piece may well have been Schroeders who, according to their TR-1 submission which landed forty days after the reported threshold was crossed, were selling prior to December - possibly from 12th October, when the price began to fall sharply and the daily volume of transactions started to climb. Their declared disposals to December, of approximately 5.7% of shares compares to just 1.4% of declared shorts on Oct 11th (according to shorttracker). Their tardy submission kept the disposals secret from PI’s during December’s recovery from 17 to 40p - a potentially profitable trading period for them.
I agree Tep.
It’s worth keeping an eye on Brent, climbing to $79 at the close today.
It was at the same price on Dec 1st when Shel closed at 2568 : https://invst.ly/12zmx5
(follow the orange lines). Also note Shel’s performance against BP, XOM, CVX.
Shel’s sp is therefore about 124p down relative to Dec 1st, around 5%, whilst CVX is about level, XOM and BP are each down about 3% compared to their respective prices on that date.
As you say there is a seasonal pattern that runs underneath other market influences and is sometimes hidden. Q1 often sees some strengthening in both OP and the oil companies' sp's.
As I understand it, a TR-1 declares the date when a given threshold is crossed: share disposals could be in progress prior to that date and may well continue after it, until the next threshold is crossed.
According to the form itself, PFC were notified on 1st December (section 6). However PFC make it very clear within the header that they did not receive the form until 9th Jan, a considerable delay, which suggests that they were either not informed as stated in the form or that they were unable to issue a statement about it for some reason.
Whatever the reason for the delay, it seems very convenient given the Business Update RNS issued on the 4th December, which might have had less positive impact had the TR-1 details been published in a timely manner
Heading for the gap-fill around 655?
https://invst.ly/12z64k
Disclosed short positions are less than half what they were last June - when the sp fell below 380, so reasonable grounds for confidence despite the pull back prior to the trading update. Profit taking ahead of the unknown perhaps?
I don’t think you’ve missed a great top-up opportunity yet, EnglishmanAbroad.
I’ve not seen a bounce either - other than the very brief trading swing on Monday when I decided to take a small punt. The daily chart is still heading down at pace:
https://invst.ly/12z3uf
Interestingly. the sp is continuing downwards whilst OP has been travelling the opposite way since Monday afternoon, as this 15’ trading view shows:
https://invst.ly/12z3wz
As I’ve said: I’m looking for more definite signs of a reversal (ie breakout from the red trend) before contemplating a further buy. I think it may be headed for the lower blue here:
https://invst.ly/12z407 , which would place it around 2390 currently or possibly even lower. The update obviously wasn’t well received by the market and the coincidental OP news (KSA price cut) appears to have masked the immediate reaction.
I doubt that Biden will 'subsidise' oil production, Clued. The shale guys are doing alright and serving his purpose without any help.
WTI at $65 would do the trick politically- something of a 'sweet spot' I reckon, with Brent around $5 higher at $70+ , which is enough to support the sp at a base level of 2250-2300.
It's worth bearing in mind that January tends to be (but isn't always) a seasonal low period for OP.
Trends, by definition, take time to establish.
Shel’s current short-term trend - which is naturally related to global markets, OP and company specific news - is currently downward as this ‘15 minute’ trading style chart illustrates: https://invst.ly/12yi98
Although I added at around 2520 yesterday, I did so in the entirely prospective anticipation that the sp would find support around 2500: https://invst.ly/12yk4a .
2480 may yet hold but, being well into trading profit this financial year with Shel, I won’t be adding any more unless I see a credible reversal at an attractive lower price.
Yesterday’s fall in sp tightly tracked the drop in OP, https://invst.ly/12y4sy
at a ratio of approximately 33x (sp £ to OP $) and also coincided with Shel’s slightly disappointing Q4 update note. The sp ratio to OP is currently very similar to the price relationship at the end of 2019, when KSA were cutting OP to put pressure on US Shale producers.
https://invst.ly/12y49n
Of course, COVID then struck - so the 2020 portion of the chart is not indicative of what we can expect in 2024. However it does suggest that Shel might drop to around 2240 if Brent continues to fall to $68.
Here’s an end of day chart link that works:
https://invst.ly/12xw8d
The gap did nearly fill (6p of it remains) as the day progressed but the price ultimately closed below the longer term red and green trends. As is fairly obvious, a drop below 24.50 opens up the possibility of a deeper fall
Oil is volatile stuff and a new price war seems to be starting - remember what this did to Shel’s sp last time?
Only on Friday an article in Talkmarkets was saying:
‘As global tensions escalate in the Middle East, the oil market is experiencing a surge in prices,’
Yet yesterday the story had swung to this:
‘The downswing comes after Saudi Arabia reduced the February official selling price of its flagship Arab Light crude to Asia, pushing it down to the lowest level in 27 months. The action followed growing supply and competition with rival producers.
“Oil watchers are rightly questioning that the kingdom’s cut is not only aimed at quelling interference from non-OPEC supply [ ie US Shale] but from its very own cartel membership.” – said PVM’s John Evans. ‘
The fact is that, contrary to cartel policy, some OPEC producers have increased supply , whilst US production is also threatening OPEC’s control over OP. Three weeks ago Bloomberg reported:
‘OPEC’s one-time nemesis — US shale — is rearing its head just months after the sector was all but written off as a threat to the cartel’s sway over worldwide oil markets. Drillers from the Permian Basin in West Texas to the Bakken Shale of North Dakota have ramped up oil production well beyond what analysts foresaw, pushing output to a record just as OPEC and its allies put the brakes on supplies in a bid to arrest price declines.’