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In the food sector Asda and Morrisons are growing market share at the expense of Tesco. Tesco and Sainsburys are already way over £3 so that rules me out on them (see my last post) and Asda is owned by Walmart in the US. Hence my interest in Morrisons - Buy at £2.40 and sell at £2.55 is my current thinking on them (a very slow but almost inevitable £500 profit IMO).
I generally invest up to £10,000 at any one time and look for quick £500 - £1,000 profits. I'm quite risk adverse so only look at blue chip FTSE100 companies and the share price has to be less than £2.50 for me to get the volumes I need to make these quick returns. That narrows the field quite a bit. I still won't touch the banks at the moment but I'm getting less scared of them now than I used to be since Barclays took off but lets see what the US stress tests and the first round of UK bank reporting brings. So my natural focus has been the insurance sector as I see a lot of potential in these shares. I keep toying with Morrisons but its normally a very steady share and you have to judge the big leaps and drops it encounters. It seems good value to me for a long term investment during the downturn but theres more money to be made from short term deals in the insurance sector. LGEN is good for day trading but I don't feel overly confident putting money in there above 48p because they haven't been above 50p that much until recently and in my analysis of the lows in the insurance sector they seem very highly priced in comparison for risking holding onto them.
If you look at a candlestick chart for this share immediately after Easter, there was sideways movement while it traded between 65 and 70p with a lot of indecision about where the share was heading. There was a little of this before Easter as well but not quite so pronounced. The break was then downwards followed by a small recovery. Because of the announcement yesterday I think we will see a similar pattern of indecision and sideways movement for a few days until it breaks out again. So I expect it to oscillate predominantly in the 55 to 60p band thereby testing the high and lows. There does seem to be some resistance at 60p but is support starting to form around 58p now?
Panmure Gordon downgraded FP from a Buy to Hold yesterday but gave a price target of 80p. Don't know how much weight you can put into their rating as 5 out of the last 10 ratings on this share in the last 6 months have come from them! It might be having an effect this morning though??
Live price 59.1 Opened slightly down and early trades don't yet suggest it will rocket nor for that matter plummet again and there's an average sort of volume at the moment, could turn into a rather dull day, lets hope not.
I've been tracking the insurance sector for a few months now and have made all of my profit so far this tax year from Standard Life trades. I always compare the lows of the day for each main insurance share with the lows of 6th March when they all hit rock bottom together thanks to Aviva's dividend debacle. Today's comparison shows the following % growth (of the lows) since that time: LGEN +114%, PRU +82%, AV +68%, SL +42%, FP +8% and the FTSE +16%. Based on this LGEN and PRU are high risk (overpriced) to me but certainly still good for day trading and FP is either way undervalued or the runt of the litter and that's what has made me focus on them lately. AV and SL seem to hold the middle ground and seem to move within fairly predictable ranges and when they fall heavily they tend to bounce straight back whereas FP seems to struggle to do the same of late.
Today's range was 6.2p which is towards the top end of what this share typically swings between, its more usually 3 to 5p, but I think there will be an even bigger range (7p) tomorrow and my prediction is it will swing between 55.7p (low) and 62.7p (high) so I'm still hopeful of getting in at 56p. Only time will tell. Good luck to everyone anyway, I've enjoyed the input from you guys as well today.
Not much chance of it falling back to 55p in the next 10 mins but I reckon my prediction of a 58.5p close will be pretty near. I agree with qatari1 that it will be a big day for this share tomorrow. Not just the upside viewpoint though, I think it could trade for a while tomorrow morning at 55p again, in which case I'll be in like a flash.
qatari1, I wasn't doubting your motives I was just making a few topical jokes in one post. Pendulum seems to be swing back the other way now. Live price back to 58.5p yet Dow has recovered...........very strange.
And there I was thinking qatari1 was trying to make a silk purse out of a sows ear! I don't want to make any rash(er) decisions today as it's me who is responsible for bringing home the bacon.
Just hit 61p - Looks like I've missed the boat and misread it today !
Aviva seems to be recovering as well at the moment but Standard Life (my prefered share) is still suffering quite a bit, probably because they have yet to show their hand (Thursday morning). Seems to be some resistance at 60p today (not surprised).
Back to 59.4 live price, so no I haven't bought yet. Let's keep watching though. Dow also showing signs of recovering but again early days..........
Dow done 1% already
Live price 58 and falling. Good luck everyone.
Falling again quite quickly and the New York bell hasn't rung yet. Hold tight, it could be a rough ride...................
You may well be right (live price just hit 58.9 so back to opening price) but I still think there is a good chance of a fall again this afternoon and if I did buy now at 59p and it goes back down to 55p (my gut feeling). That would be another big loss on this share to recover from....
Well that's two of us who think there will be another substantial low point this afternoon (55p for me) and a close of 58.5p (for me). There has been a really large volume traded today already compared to recent averages, which usually indicates a strong price movement. Just hope 55p is the real rock bottom for now.
I bought this share last Tuesday (15,000 @ 63.5p) thinking it had slid enough below what looked at the time a safeish support level of 65p, hoping for a return to 70p. I saw it fall each day to lows of 61.7, then 59.9 and 59.2 and it seemed to perform poorly each day versus the rest of the sector. Sensing possible further drops this week with the announcements due (remember the last Aviva drop on worries about its dividend!) I got out late on Friday afternoon at 64p and made a stunning £8 profit (could have done slightly better as it turned out on Monday morning I know). But I'm so glad I did get out then. I will come back in at 55/56p though. Will I get that chance again today I wonder?? I held off buying this morning for fear it could test 50p !!!
The insurance sector as a whole is down today (indeed most of the market!) so it's hard to determine how much of today's drops are due to ecomomic concerns (swine flu & US bank stress tests etc etc) and how much the Friends Provident price is falling on top of that because of their statement today. Aviva spoke yesterday and it was fairly positive, FP's statement today to me is fairly negative, so the sector decider may well be on Thursday when Standard Life throw in their statement. Pru and L&G aren't making their statements until early / mid May. Whatever happens it truly has been a pig of a day....(pun intended)...!!