Member Info for Boyobach

Was never out vog - held 85% throughout - but made my usual bit on the side, like I recommended just now.

Well done on your trade btw! I just hope that a break downwards (it is on the cards!) doesn't happen before I flog today's tranche . Ha!

Good luck

Bunks:

You are right - and there will certainly be some downward pressure.
If it does break down then the panic sellers will come out from their, er, bunkers and it could be very rough for a while. I wouldn't expect 220 to hold.

If it does blow then keep some powder dry in case it goes all the way - and don't be tempted to grip the knife in mid flight! Good Luck!

Hi JFT:
I think a management that stares at the sp and worries about it probably isn't doing a good job. Frankly they are probably not too concerned about it - any TO approach will see it go up by at least 30% from here and probably rather more.

G's management have done a fine job of recent times and, although I do poke fun at Wayward and Nat's era, I think they genuinely believed that G's RTO of Vallares was going to be a big money spinner. In fact, I seem to recall that Wayward and pals had a very generous bonus scheme in place on meeting an sp target and/or achieving a main market listing which seemed quite achievable at the time (sp went up to around £11). What happened next, ISIS, Non Payments, Dusters, Taq Taq massive downgrade, Buy back bonds etc etc completely killed that dream off.

So today's crew are trying to consolidate what little remains of that dream and, somehow, put together a plan that releases the value that is left after all the carnage. It's a tough task - and I'd rather they focused on that than pay attention to a few grumbly PIs - who have actually done tons better than the poor buffers who lost out at 'old' GKP.

If everyone settles back, takes their eyes off the screen (check it daily rather than stare at it), do a little bit of profitable, planned trading on the side and wait for a year or two then their quality of life and blood pressure will be a whole lot better. Anyone expecting a quid rise in the next three months is going to be disappointed - the management will try to save any blockbuster news (if they have it) for the full year.

I’m hoping that today’s price action will demonstrate why very simple charts can be a useful tool.

This morning my limit buy order, set early yesterday, triggered. It was based on the ‘wedge’ pattern I gave a link to in a post. That wedge, which Bottomzup had mentioned even earlier, is a powerful indicator and goes back to April for the lower line and May for the upper - this means that closing prices have never been lower than the lower line nor, with the exception of a spike around the half year results, have they closed above the upper line. Intraday ‘spikes’ have overshot them occasionally - so that is where I tend to place speculative limit orders, taking into account any adjacent trends, resistance or support.

Here’s a close-up of this morning’s action - where my speculative order was set to trigger just below the wedge and just above the trend.

https://invst.ly/8uryd

Bingo! Unless, of course, there’s a breakout downwards! Any such breakout would be very significant at this stage.

One thing about wedges is the very obvious fact that they have a finite life and must eventually be broken because the two lines are converging. This particular example may have four weeks left - that could be pushing it - with a break obviously getting more likely as the weeks go by and the trading range tightens. The clue as to whether the sp will break up or down is often given by which of the two lines is being tested the most.

It may be Thursday - but why wait? Snap's gonna be the man!

Hi Hydrogen. Absolutely agree with your post, including this: 'Isn't GENL best described as a growth stock? It maximises investment to fully exploit assets?'

As investments go, Genel has so far failed to produce capital growth over seven years - bearing in mind that investors originally chipped in £10 per share and the gas was supposedly around 5 years away at that time. Neither have investors seen any possibility of a dividend. This was the point I was trying to make to those who cannot fathom why the company, by their standards, is undervalued. I don't personally think it is undervalued -rather, I think it has potential value that has yet to be unlocked. The market has priced G on its possibilities before - and many got burned as a result.

Posters on this board can often fall into one of two camps: cheer-leaders with a fierce belief in the company and disdain for the market or furious discontents who swear at their screen and think the sp is a joke. I think this polarisation can make us miss the point: G needs to be evaluated coolly and rationally, both as a business and as a stock. It probably isn't going to produce quick bucks from here just because it is now cash positive - more likely it is going to have to spend a shedload in order to unlock its real earning potential. I don't think that some here fully grasp this but the market does.

…..and i will add that i still have no idea why the market will not award any gains…..

Well there’ve been a few reasons expressed by folks here. Sometimes we focus on just one factor - eg cash generation and assume that that is all there is. G’s value is tied up in assets which are in the ground. It requires cash to release those assets and, once they have been extracted and sold, the remaining asset is smaller and worth less. Eventually it will be gone.
The market realises that G needs cash, lots of it, to exploit all its assets. Is it going to borrow or go into a partnership? G has never paid a divi in seven years and is unlikely to in the foreseeable - so what kind of investment is that? It’s not as simple as just the cash generation.

I think it was Bottmzup who drew attention to the wedge or handle pattern on G’s chart.
It’s well worth revisiting it as the last few days fit it rather well. If it is correct then we can expect the sp to tighten up for a couple of weeks until it breaks, hopefully upwards.
My own version of it (link below) ignores the apparent anomaly of 7th August (half year results) which caused something of a spike that corrected itself within two days.
https://invst.ly/8ub63

Two recurring themes often appear here which appear to cause frustration:

G v PoO
And
G v GKP

Here are two charts that demonstrate the similarities and differences that have occurred over the last three months and why it isn’t especially useful to compare the three on a day to day basis

The two charts, one for G v Brent and one for GKP v Brent, are ‘zeroed’ on July 6th - ie the sp and Brent scales are all at zero % at the start of the first day. You’ll then see that, at close of play on 10th October ( the last candlestick), GKP is at +2.92%, G is at +4.27% and Brent is at +6.75%. So they all went up slightly over the selected period.although the path they took between was hardly the same. Sometimes there seems to be a correlation between the three (eg 15th August, 6th September) but usually it is other factors, more specific to each, that have dominated.

G v Brent
https://invst.ly/8u6tq

GKP v Brent
https://invst.ly/8u6uh

Good old Malcy. He had understandably become reticent - apologetic I seem to recall - about writing favourably about G since it became one of his, er, less successful picks as it plummeted from July '14. More recently, this year, he's added it to his bucket list.

As hydraides has hinted in his colourful way, it's really not been a good day for G. But one reason for that is probably - as I said earlier - due to the 'quick buck' brigade sensing that nothing dramatic is going to happen (like March-May's rise). They are therefore likely to be selling, along with anyone who bought in the summer and is feeling pain. The longer it takes then the more difficult become the levels of resistance in the 270's and 290's too, as sellers there will be waiting for the opportunity to unload. We've seen how tough 258 is.

I guess this could consequently go lower in the aftermath of today, hopefully not back below 230. And yes, comeonvog, I may well buy then if the charts suggest it's a good idea. Not touching it for the moment though.

Ya got to sweat if ya sell.....

Not if you've banked your profit and you hold enough to benefit more If the price continues up. It's only stressful when you hold too many and the sp drops back below your average cost. I do know where my exit and re-entry points are, but am always interested when others apparently let them pass. This really needs to get to and hold 260 or it will be revisiting lower levels.- no sweat either way.

Thanks JL - understood.

I too remember the slippery slope down from G's £10+ days when Mr Wayward was at the helm.

It still owes me money, and I have every intention of getting it back. Hard work though and I know it won't happen off the back of updates like today's.

I know you don't believe they are any help but you should take some notice of simple charts - it's like switching lanes without checking the rear-view mirror if you don't.
Best of luck

Ha, Comeon, you are reading me wrong. I want it to go up overall but happy to play the volatility. My query to JL was genuine. Anyway, boards like this don't influence sp in the slightest.

I already took my profits today because 257 looks very sticky and I was 11% up on 230 bought a few days ago. But I only trade on up to 20-30% of my core holding, deducting any profits from my overall holding cost. I'll be happy to see this hit 270+ then sell some more and hope to re-buy at, say, around 260. I'm still overweight according to my plan - so in 'sell' rather than 'buy' mode.

Hi JL - just a quick query about something you said earlier in the 'For Me' thread:

‘Hell, that's nothing new ….. which is a reason I'm loathe to invest here. ‘

So I presume that (unlike me) you are not currently invested in G, in which case (like me) you didn’t have great expectations concerning today’s Update or the reaction to it ? With the price recently as low as 224, and now 30p up on that, I’m wondering what sort of re-entry point or conditions you are looking for.

Yep.

It's not got past this resistance since the big drop in mid-August. It'll be an important indicator if/when it does.

Obviously this is a pretty partisan board, so there tend to be high levels of anticipation followed by much enthusiasm when the company says the kind of positive things that are expected. But, from an objective point of view, the company was unlikely to exceed market expectations today. It has done better, I believe, than previous guidance - but the market expects that and most companies will set guidance accordingly.

The CEO says all we need to know in one line: ‘With notable opportunities in the portfolio, Genel is well positioned to generate significant shareholder value.’

This says two things:
The company hasn’t yet generated significant shareholder value.
It has opportunities to do so in the future but will need to grasp them.

The market price is currently based on the first of those having got rather ahead of itself in May.

Hopefully G will now establish a new low point at around 247 as opposed to 227 or 217. That would put a successful assault on 257/260 back on the cards. It’s early days on that. Alternatively, the ‘quick buck’ brigade may conclude that there’ll be nothing much to see here for a while and sell up, driving the price back down in the short term.

Progress required on other assets

Because, by some measures and consensus here, G is undervalued I know there are high expectations that tomorrow’s update will trigger a reevaluation by the market. It may well do so, although in my experience interim updates are rarely spectacular and have usually been well anticipated by the market (except when it’s something like a field downgrade!). The DNO release today will have removed many of the unknowns.

It may seem a modest expectation, but if it breaks firmly (ie permanently) above 260 this week I’ll be very pleased. Judging by the last two months I think it could be a long haul back to 300p, as impatient folks who missed out last time or have simply got fed-up waiting for progress beyond that level decide to sell, thus slowing progress down. Under these circumstances there will be scope for trading along the way, especially for those who stocked up at recent lows in anticipation.

GLA

Absolutely Lemming - it's been very disappointing to see.

As it seems to perplex people so much, the following chart is a crude attempt to show the relationship between POO and G’s sp from its peak in May to today.

The oil price is represented by LCO, CFD - the nearest I can get for this exercise. The chart shows both POO and G rebased to 0% on May 18th and illustrates that although the respective prices follow parallel trends (grey diagonals), G fell to a lower level around 5th July, recovered for a while, then resumed the lower track on the 15th of August before moving lower still on the 6th September and again last week .

These jumps and slides lower are not shared with POO and so the net effect of them is that G’s sp is around 90p lower than it might have been today had it simply followed POO’s trend from mid-August.

G v Brent 1 (rebased on May 18th, POO is purple line):
https://invst.ly/8tada