Well, that was a good performance today!
Not enough to call it, but good enough for further examination:
At 1343, it was just enough to sit outside, right on the doorstep of the first intraday resistance, to close the day.
- but that intraday high of mid 1350's went one better by cleanly hurdling over that initial resistance, but came unstuck by getting as far as snuggling up to the underside of the second intraday resistance only, and after an afternoon-long battle, conceded to the bears, and was batted back down.
Had it not done so, and held, closing the day on that mid 1350's, it would have been as close a guarantee as it's possible to get that the floor was likely in, and Monday, barring an earthquake, would have been a shoehorn fit for another bullish performance.
However, closing just on the underside of the first resistance by day's end, was all it was to be. Sadly, none of the intraday resistances were breached by close.
Still a good performance none the less, but not throw a party time, just yet.
. . . And so, into MONDAY :
Monday, for further bullish certainty (of the floor being regarded as in, with Thursday's intraday in the 1320's) needs to close on or above the mid 1350's as an absolute minimum!
But should the SP close on or below the v low 1330's then it's been a false rally today, and as the saying goes, it ain't over until the fat lady sings, and the SP would still be in the clutches of the bears.
All above IMO only.
" The Shorts are buying up sooner or later they going to have to buy big to get off this loss "
I reckon they're gone and that's just out of date data up there in the short tab.
Check the date they notified the regulatory authorities. The SP was 52-ish on that date. Now assume they sat on it a day or two before doing their legal duty or risk fines and disbarrment and bought a little earlier than the date they reported. That would mean cicra 55p-ish.
Whatever, they have doubled their loss if they've done nothing in that time.
Imagine they were newbies and instead of a profit their loss is now double their original (short) trade.
Professionals just don't engage in "hoping" the market turns. They survive because they take small manageable losses when things don't work out, unlike private investors who let things run out of control (just read these boards LOL!)
I would be surprised if they're still holding a short position taken out in the 50's, as they look at over a £1 today on their screens - but it was rising plenty after the 50's before the current £1 SP; so they had plenty of notice to clear out.
In fact, how much of this rise is them closing their short to get out quickly?
Whatever - they've closed. Surely they can't be worse than retail investors and still hanging on to a losing position -
. . . can they? :)
Was expecting far worse lower supports after the week's close, but 1300 is still far away just out of reach on the extreme supports.
Initial support that I hope the SP closes no lower than on Monday is: lower 1320's
If it's another bad day then I don't see it progressing much further than 1313's
And it would take a helluva shunt to get it to 1300 as the third support is just below 1300 at low 1290's.
Safety, and the end of this particular bear drop in the SP lies just barely 10p away at mid 1340's. Close at mid 1340's on Monday - and all is saved, for now.
It should be noted that:
The SP closed just fractionally inside oversold territory. That's an ominous indication that seller exhaustion is not too far away. Let it deepen and rising out of oversold before calling it. I've checked back years, and unbelievably oversolds in GSK are not a common occurrence. Mostly they are small pinpricks and zap! - seller exhaustion. So if this follows historic similarity, redemption is close to hand.
The long term trend is undisturbed by these medium and shorter term down-waves. It's still a longer term buy, IMO.
The only debate is; will this recover before 1300 is ever reached, or after it gets breached? As signs of seller exhaustion are already showing up on the relative strength index I think 1300 stands every chance of seeing off the bears on Monday.
All IMO only of course.
" We appear to have cut through the levels you mentioned?"
- Fatprofits, a nice opportunity to clear my conscience:
I was all set to update on the supports after I had this morning's opening price (for better accuracy) this morning, but it was 9:00am already so tossed it all aside, as shocked, I'd only be posting of terribly low potential supports that were already occurring before my eyes on screen.
I had some indications beforehand, which I will expand on, but emotionally didn't believe it would transpire as so,
which just shows - trust strategy - not one's emotions.
First off, things although things look dire for the 1300 barrier on Monday, I don't think it will fall on Monday, but before that (separate post on that) back to last night:
I initially had 139 as the initial intraday support of the day based on 3 differing formulae of guru's from yesteryear (from the pre-digital age of 'the pit' for pivot points) I use all 3 and obtain an average of the 3.
And this is where I let emotion hold sway.
I just couldn't believe that 1350's AND 1340's had been 100% totally obliterated in the calcs, so I rounded up that 139 to 140 to remove mention of the 1330's - for emotional "reasonableness" as I didn't believe it all possible, and there must be an error - even after checking the free sites for comparisons but they were as usual, no help at all.
It troubled me, so was about to write another post correcting the 140 back to 139 but someone else posted straight after and I let it slide, as it was getting late
- but I was still bothered by that, so knowing that the opening price of the day gives a finer "guesstimate" and is part of the calcs, I thought I'd update and correct it all first thing in the morning, as it wouldn't alter that much - or so I thought.
When I inputted the opening price my jaw dropped in shock - and then in shock at the screen price!
The new supports were coming out as 1336 for the first support, 1326 for the second support and still 1290's showing as a possible for today as the third support. No 1350's or 1340's anywhere in sight. My initial reaction was one of: this is rubbish, but checking the screen live prices - it was already happening in front of me!
On the one hand an optimist could say well at least the SP closed in the vicinity of the first support it encountered, but experience tells me it's always a bad sign to set up camp up, around a support point just as it's a positive to camp up around a resistance point which in this case was low 1370's.
Will post separately what the likely resting places might be on Monday, in the next post.
Fleccy, I will get on that BT Orient Express luxury special train at the first available station it stops at - once it gives off the confirmed bullish, long term signals.
Which means, to achieve that long term (if this truly is the bottom) that my station is many, many, pence seriously higher than you see here currently.
I don't fret over that. I accept it.
I keep gambling for my miners; both of which I'm making a packet on, at the moment (GGP & SLP).
But then again, they both did have a good signals box junction, giving me a green GO light :)
Yes, I agree about not hoping what you wish for TigerBTTail, lest the desired effect brings additional concerns.
So stop reading right here, because . . . . .
Been reviewing that unexpected drop during recovery after the March crash, that later ended in early July.
I was happy enough topping-up at 42, and mission accomplished with my average now at 49p, I tied my horse at the saloon bar, horse rail, happy as Larry, and mosied on in, to celebrate at the bar, yup!
Only in retrospection did I later lament not adding at either 41, 40,39,38 or 37 LOL!
It was the considerable exceeding down below of the long term 200 period average that concerned me, finally with the SP halting at 37.
It was then after the very, very real phenomenon of 'mean reversion' completed, that the SP then took off, never looking back. It's now at it's widest from the 200 day period average since this 5/6 year uptrend began!
So, separate to my 'seasonal' thingy, there's an additional 'concern' - mean reversion.
The 200 day period average is currently way, way, down there at 49 and slowing a tiny amount due to calm September and so far, calm October. In other words, mean reversion based on pure mathematics has to occur sooner or later; either by the SP remaining calm and the 200 average coming up to it, or the SP taking a dive southwards. Historically the SP has 100% headed down to meet it.
Throughout the past near 6 years magnificent bullish uptrend, the SP has periodically soared far above the meaningful 200 day period average, only for the SP to revert deliriously back down to the mean average - occurring only
after the SP is at its widest high (or widest low) away from the 200 average.
Well right now, and only clocking it this morning I've taken everything off logarithmic scale and all sorts - and still the same - the distance between the current SP and the 200 day period average is at the widest ever, over that entire, near 6 year period. Something has to give!
- Mean reversion visit?
If so, I prefer to get it over and done with now, anytime between now and Dec 31st is acceptable to me, before we get into the new year, as I don't want it messing with sentiment then.
" Looks like we have said goodbye to 60p. I was hoping for one last top-up at sub 60 but I don't think we'll see that again, unless the basket tanks, or we get a 10p special dividend "
I think it's fair to say most on here are of the same mind on those sentiments. I have had a 57p computer limit-buy in place and still to run to the year end, but as above; not confident of knabbing that. Plus that limit buy order is only one of several top-up's I'm seeking - before the year end.
XD day next week, so the final 2 days of the week to close the month of October may over react against the SP, as some stocks don't equate equally to the dividend amount during XP period.
Also, not ruling out that 'bargain' condition just yet as this sudden rise could be related to those adding or getting in purely in advance of the Divi qualification. Therefore, not yet convinced that this rise will sustain throughout the next 2 months after October completes.
Don't have to top-up, but will do so as nothing on earth, bar the reality of events on the day, will persuade me against the notion that SLP will enjoy a strong bullish performance in the early months of next year.
Would rather bag more at a decent discount between now and the year end, but if it's to be 60's or more by the year's end, then so be it.
The 'traditional' market lore rule-of-thumb to the above question is usually:
Sell before a trading update, when you've already decided to take profits anyway, to protect those profits achieved, in case the trading update disappoints, as many sell on good results regardless, affecting the SP.
Only ever buy before a trading update, if incontrovertible evidence the company is about to reveal a significant increase in trading results.
- However the consensus of analysts for BT are forecasting the most dire results to date, this Q2 next Thursday, so the market is not expecting an upbeat result from BT.
And if results turn out as analyst forecast, then it's likely not to enhance the SP.
So will BT upset the applecart and beat those market forecasts? Only next Thursday will tell; as no one knows for sure.
The main question should not be: is it better to buy or sell before a trading update - but what is the long term predominant trend in BT?
Determine what sentiment is saying vis-à-vis the SP - long term, and that's your default safety position to adhere to.
So, what is the predominant longer term trend - bullish or bearish? Answer correctly and that's your answer. Gambling on bottoms and tops although enjoyable if you get it right, is just that - gambling.
The balance sheet metrics are screaming undervalued - loudly.
Market sentiment towards the SP has for years and is currently, saying the opposite.
My preferred route? Always, always, follow the long term, predominant trend - whatever it happens to be.
Downside to trend following? (And it's not everyone's cup of tea)
- You miss the absolute bottoms and absolute tops; but enjoy the meat in the middle.
( For fun only, remember )
The SP dropping further tomorrow - or turning up for a change?
Calculate my own pivot points when the mood takes me, and here's my thoughts for tomorrow Friday (daily pivot points have a lifespan of one day only; they change every day) -
1) Close the day in the high 1370's (or better) and the SP is leaning towards Monday being a bullish day.
2) Close the day on 1340 (or worse) then it's leaning towards Monday being a continuation of bearishness.
- (Can hardly believe first support is that low, as my personal preference is for the floor to be somewhere in the mid 1340's as the ultimate floor)
3) And the actual pivot point is coming out in the mid 1360's,
- So if the SP closes in that area, it's market indecisiveness going into Monday.
"... it doesn't seem to matter what they develop or what blockbusters they have on the market, for some reason they are unloved..."
Just what I was thinking upon reviewing GSK's PE ratio in comparison to it's competitors.
GSK's forward P/E ratio (not historic but fwd based on forecast earnings) is showing as P/E 11.7
Yet the industry average is P/E 18.8 !
So for GSK just to be considered as merely average to its peers the SP would have to rise to well over £21 just to be considered plain manilla, bog standard, average!
Yes, it's true to say the market has concerns over GSK.
Debt? The proposed Pfizer thing?
Whatever - it is, what it is.
The market is running away from GSK
- at the moment.... At the moment.
" Given the current share price that's like looking up at Everest from ground level!"
Knew I should have refrained from 'forecasting - it's not my way. Honestly. LOL!
- As I prefer to trend follow and not dictate terms to the market, by standing aside from the oncoming train, letting it do it's thing.
Just reviewed that £20 post, and a small amendement:
and am now moving that £20 to spring of the following year - 2022,
with just under £20 (say £19.50-ish) occurring by year end of next year, 2021.
Whatever the SP low finishes at by October month close next week, I'm not expecting the SP to deepen lower in the months that follow on, but instead I'm thinking, each month will close slightly higher up than October does, but all months to at least display such volatility that October's lows will near enough receive an intraday visit each month until the commencement of the new year.
That's what I 'feel', based on looking back into GSK's history
but you know what the fast talking small print advert says about past performance repeating in the future, don't you? :)
That Q2 RNS came out near the end of July. The SP dropped noticeably on the day (after first intradaying all the way up to 1600) .
So since then - the market has gone for the full month in discounting the news as if it was a profit warning. Would be perverse if the market punished the SP further - it would appear to be fully discounted into the current price and then some.
If history repeats itself then I don't think 1300 will be seen. Prefer just a little below 1350-ish with 1300 as absolute worse case scenario. If lower than 1300, I won't just be shocked in mouth agape fashion, but something else beyond our ken would be going on.
There have been 2 major drops of this magnitude since the last big market crash era of 2007-2009. The floors of both those swung wildly up and down, but the SP kept temporarily revisiting their lows for 3 to 4 months in each case.
I'm guesstimating that floor is just a little below 1350-ish at most, but if history repeats itself then it won't be until early new year, January, before the long term uptrend reasserts its authority IMO. In the meantime I won't be surprised should the SP veer wildly from down here-ish, up to maybe circa 1450's and too and frowing all the way to January next year.
I have my own strategy for rebuying so will try and demonstrate some self discipline, but know fine well I will be sorely tempted should the SP sink to 1350 or just below.
Long term SP expectations? Circa £20 by this time next year. But violent swings all the way non-stop.
Have sold my entire holdings this morning after yesterday's reversal to the short term trend.
I am utterly convinced of the long term uptrend, but foolishly took positions before this short term downtrend had expired. After 2 buys in the 1370's it brought my 1430's initial buy down dramatically and I was all set for further buys - to the upside.
However aware, I had broken my own entry guidelines, yesterday's reversal convinced me to restart all over, as with industry grade shorters on the books I don't fancy gambling on where the floor is (which as said previously; I foolishly did so; old habits die hard:)
It could be this high 1300's/low1400's turns out to be the floor - whatever, I much prefer to invest when the trends are short term bullish to match the long term trend too, as can't truly be sure where the ultimate floor is, just yet.
I will return (even if at a higher entry point) but far more relaxed now, than I was.
PS. Was thinking about exiting when in small profit yesterday. But after the reversal to a small loss I'm finally out 100% this morning for near £60 loss. I'm happy it's only that small. Rules are not rules if one breaks them. Just had a £60 lesson in that; pleased I can take only a v small loss rather than let things potentially get out of hand as they have done in the past.
I'm NOT bearish on GSK, on the contrary.
Just no clear signal coming through of the resumption of that uptrend yet; it'll come - and I will re-enter then.
Was using H/L platform on my phone.
The white ask/bid box should close when you click accept, but nothing happened. Assumed it was the phone not actioning my pressing the screen so tapped it again, with the same pressure as the first time, and it did what it is supposed to this time and showed the completed buy.
It was only a day or two later I noticed 2 buys had gone through within 5 seconds of each other.
Should be impossible from the one window as usually it actions in a micro second. The platform might be susceptible to mixed signals from the phone. Wasn't using HL's app as I prefer the desktop version on my phone.
" With investment in FTTP and 5G, wouldn't Net profit be down anyway"
Yes, it will be, yet even the analysts show a massive jump in full year net profit in year 2 from this year's (year 1) projected lowly £1.4b net profit, up to £1.6bn in year 2, and increasing further in year 3.
It appears from reports in the media, that Jansen has some additional plans and ideas to keep the revenue and profit cooking nicely whilst this is all going on, but is being thwarted by the entire board led by the chairman Du Plessy. Has it coloured the analysts view with their forecasts for this year suggesting the worst results on record? (But net profit dramatically improving in years 2 and 3 - apart from revenue which they keep reducing indefinitely).
I have a hard copy of the report on the boardroom backstabbing against Jansen if you haven't seen it.
Only just noticed a silly typo. Was trying to delete a comma and replace with a decimal point but accidentally deleted a "1".
So the sentence that states:
"H1 Revenue analysts expected @ £10.642bn - down from £1,413bn last year's H1"
Should read £11bn for last year's H1 revenue as follows:
H1 Revenue analysts expected @ £10.642bn - down from £11.413bn last year's H1
" Thanks velo
So are you expecting good results
All considered "
I'm mixed. I suspect their revenue forecast will be pretty close to accurate. But I totally reject their Q2 net profit forecast. I think a worse case scenario is net profit starting with a 3, whereas the analysts have the net profit commencing with a 2!!!
Not expecting a net profit commencing with a 4 like the old days, but it could be possible, as it was in Q1!
Should the Net Profit of Q2 start with a 4 as it did in Q1 - I would expect investors to overwhelm the analysts sentiment and drive the SP dramatically north.
But with a danger of only £200m+ odd, I'd happily settle for a net profit in the 300's.
So mixed. Revenue pretty much down as the as the analysts state, but that net profit forecast is too downbeat IMO.
Half and half - mixed. IMO.