ASOS have dropped quite significantly in the past week for no particular reason and I view this as the perfect opportunity to invest as I can see them bouncing right back up to the 5.50p mark in the next 2-3 weeks. STRONG BUY!!

legend

I think jgt and SEADOG are answering my questions re ASC. I challenge anyone, as I did jgt, to interpret the BNH graphs - the transaction volumes are really too low, I think, to apply statistical research to! lol! lol from legend all the way to the bank! Will mention you in ASC Challenge despatches later this evening! Are you doing all the buying yourself?

I just think I am beginning to cope with these chart things when they land a new one on me - EOD, now , what's that? Earnings over deviation? End of decade? Everyone overboard, danger? Yes, I am taking the charts book on my Xmas vacation!

Now, is there a theory about repetition of patterns, as with weather forecasting. If so, there is a remarkable similarity between the pattern late August and early September and now at somewhat higher levels. That would suggest a rise to about 80p and then a correction back to just above 70p before a surge over Xmas, New Year. If not a known technigue, we'll call it the RPR (Robson Pattern Repeater)!

Eric

Eric: You tease....End of Day. If you really want to get into charting patterns, there is something known to Chartists as Elliot Wave patterns, based on the Fibonacci Principle which I am sure you can easily recall from your school days! Some very clever people even superimpose moon patterns on to the charts to ensure no possible influencing factor is left out! When you have managed to navigate yourself through that I look forward to continuing the dialogue! Meanwhile keep it simple, and just take each day as it comes......John

PS: Exactly what books are you taking with you on your skiing trip?
PPS: Glad the charts told me to sell PCI, and like you place funds in the other gamble...PET!

Thanks for your response guys, much appreciated.

EWR, I bought my lot 24k shares at 61p and another 12k in the 70s. I don't believe in chasing prices up.

I have spoke to 1 analyst about BNH and I told a mate, (that is a trader) to consult his analyst at his investment bank and both believe the company could be 1.40+.

It has very good prospects and I really feel fund managers will start looking at it soon.

Brewin Dolphin have put a price target of 1.10+ since results but then again they would because they floated it at 10m, so they wouldn't want to admit to floating the company at a massively undervalued price.

A possible reason for the erratic market making is because I know a lot of people bought from 60-80p and mms were being stubborn keeping price low thinking that people will sell out on boredom and because the company floated around about that price so they thought it was a fair price. They are short of stock so move it around alot on buying.

The company was set up in 1994, and just over the past 6 months has generated 1m cash. Looks like a very good business.

My broker is a fundamentalist and he believes that if a company is worth 1.50, then it should be regardless of trade!!! I am happy with his prediction.

Hope you have a good weekend EWR and SEADOG

Eric: thank you for your good weekend wishes. If you are serious about technical analysis (TA) a small tome to start you off would be " Charters on Charting" get it from the local library, the bible of (TA) is "Technical Analysis of the Financial Markets" by John J Murphy, a very comprehensive book and a long read. Alternatively have a look at Metastock's web site "www.equis.com" a Reuters company, very interesting. Best wishes SD

ASOS CHALLENGE PORTFOLIO, 3rd December, 2004

Well! That was the week that was - its over, let it go! Into a loss and lagging the index! Plenty of drama! But also plenty of opportunity! Thought I would approach review asking whether I would invest at current price - speak up, please, if you differ.

company_________ EPIC pp(p) issue(m) shares price_ value_ cap.(m) gain % gain wk

Broker Network H BNH_ 77.5_ 15.065__ 6450__ 118.50 7643.3 17.85__ 52.90_ 16.75
ASOS____________ ASC_ 56___ 67.97___ 8900__ 76.50_ 6808.5 52.00__ 36.61_ -6.71
Stanelco________ SEO_ 4.5__ 78.225__ 111000 5.88__ 6526.8 4.60___ 30.67_ -2.00
Civilian Content CCN_ 16.25 41.883__ 30700_ 16.00_ 4912.0 6.70___ -1.54_ -3.03
Yoomedia________ YOO_ 22___ 125.538_ 22700_ 20.75_ 4710.3 26.05__ -5.68_ 6.41
Sterling Energy_ SEY_ 17.25 822.712_ 29000_ 15.50_ 4495.0 127.52_ -10.14 -11.43
Petrel Resources PET_ 124.5 58.625__ 4000__ 102.50 4100.0 60.09__ -17.67 0.99
Marchpole Hold._ MPH_ 33.75 120.455_ 14800_ 27.00_ 3996.0 32.52__ -20.00 -11.48
cybit holdings__ CYH_ 1.82_ 988.952_ 275000 1.45__ 3987.5 14.34__ -20.33 -30.95
CFA Capital Gp__ CFP_ 0.7__ 619_____ 714000 0.55__ 3927.0 3.40___ -21.43 0.00
Petroceltic Int. PCI_ 15___ 484.975_ 33300_ 9.75__ 3246.8 47.29__ -35.00 -42.65

total_____________________________________________ 54353.1_______ -1.18_ -7.89
Smallcap index_____________________________2695.00 57086.5_______ 3.79__ 0.09

I have to start with the oils, a negative sector this week, but there has been more or less drama with 8 out of 11 holdings!

1. PCI. Went through the floor today on negative drill results in Tunisia. Was it as bad as all that? Their rig was taken away without oil gushing but they have plenty of other sites to drill and plenty of cash in the bank. Fall overdone; share should recover when they tackle next drill. Over-hyped expectation. BUY for RECOVERY.

2. SEY. Also negative drill results have taken the price well below placing price of 17p. Lots of other opportunities in Mauretania. Differ from PCI in that they already have plenty of cash and revenue flow. Not sure whether there is any urgency to buy. HOLD.

3. PET. End-November passed without the promised announcement from Iraqi Oil Ministry with consequent drift in price. Strong recovery today on RNS saying only that offer was in and bidding on another field. There may not be any competition left and odds of win must be better than evens. A win would bring, probably, a multiple in the price; a loss would put PCI to shame. SPECULATIVE BUY.

4. BNH. The success story of the week. Good results have led to sharp climb in price on small volumes; presumably MMs short of stock. Well done legend, who is hero on the bb! may be more to go or could come back with low volume sales. TAKE PARTIAL PROFITS (but run rest to beat ASC to doubling!)

5. ASC. Results in line with expectations with strong forecasts for Xmas period. Profit taking but plenty of room for progress over Xmas period, as popularity of site and share grow. Then Miss Sixty launch in January (lower price than their shops); own label in March. Ever on and ever up! HOLD/ BUY on WEAKNESS.

6. YOO. Great deal of heat on bb resulting from terms of acquisition. EWR letter in Shares with good response (except issue of Director warrants); Timon Day wonders whether Microsoft of Digital TV! ACCUMULATE

7. CYH. SP collapse on results, primarily because of accounting changes, but partly because of competitive market. Should have been seen coming as in previous results. Plenty of good trading news. BUY

8. MPH. Weakness after good results, then further drop because of litigation with supplier. Market does not like litigation (see SEO). Share now cheap on fundamentals. ACCUMULATE

9. SEO. Consolidating after rise in previous week on Asda announcement. Bioquell verdict against SEO being reconsidered - bb believe they would be better to move on. HOLD/ACCUMULATE

10. CFP. An exception with no news. bb members being approached for shares and wonder whether bid in wings. Look remarkably cheap. SPECULATIVE BUY.

11. CCN. No news is probably cause of gradual decay in price. Should recoveer with repeat of previous positive news. HOLD?/ ACCUMULATE

Not a SELL in the list (at current prices)! Oh! you say, not surprised because you are an eternal optimist; yes, but I don't have a problem in selling if I need the funds elsewhere. The portfolio has take several hits this week but they all look overdone. Doubling? BNH could do it. ASC will do, probably sometime in New Year. PET could knock into cocked hat or drop through floor! Don't see another candidate, though.

Eric

Eric - have you ditched CFP ?

What do you think of the take over rumours ?

(apologies to you ASC guys)

Good write up EWR, fair comments... although I wont be taking any profits just yet....

overgrowth

No, still in CFP; see them as a speculative buy or, if you like, a speculative hold. I was convinced by the earlier posts on cfp channel by yourself and ptholden. Obviously I am sitting on a loss and have tendency to cut them. But a cap. of 3M is ridiculous given they have a unique, probably, position in the growing AIM market. They are like cybit in the sense that they are there own worst enemies when it comes to prudent accountantcy policies. Not surprised if some operator(s) are trying to soak up stock at these levels.

(also to johngtudor)

In light of above portfolio analysis, what share(s) would you pick out for a cfd? My preliminary view is cyh. I expect the chart would be seen as horrific - I am obviously going on fundamentals; another ridiculous price for a very poor reason which was already in the public domain. The trading performance is offset with the significant joint vernture type sales. Obviously steer clear of (i.e. for a cfd) oils and minnows. The other share which looks very interesting and very much oversold is MPH; how do you read the charts?

Eric

You seen BNH EWR??!!

Eric: I really think that unless you have a really exceptional small cap share eg. ASOS, it is best to avoid CFD's, still that is just my opinion. I like to see liquidity in the trading volumes, and really for a share like CYH I would use the cash market. Re MPH I would not be a buyer at this time. All the chart signals I use suggest the SP has further to come back.

As a general rule I look for a potential risk/reward play of 3:1 - with a success probability of greater than 70%.

Trust this is helpful. John

John, dawsinho, capa

Just to follow this MPH tangent for a moment. dawsinho is advocate for share and backing it strongly on MPH bb at current price. capa cross at RNS re legal action against the supplier, Boateng, and has reduced holdings at price above the current level; turns out to be a storm in a teacup and shows that you are dealing with the fashion eccentrics. ASC management seem amazing with no histrionics just solid business flair.

John: I wonder if the risk/reward calculation is objective or subjective. On the fundamentals, I would see downside as fairly minimal, except that we may not be at bottom of a spike, but give it maximum of 10%. Prospective PE is about 8 (broker forecast) on earnings up 150%, new lines, new boutiques (Korean expansion announced this morning); give it 50% upside to bring PE to 12 on finals and this would be cautious. Is that 5:1 on your reading?

MPH may not be quite in the ASC category but I think it is the nearest thing I've come across in the retail sector. The key similarities are leadership with good business plan in an attractive niche. I suspect the fundamentals may override the charts here.

Re books for Whistler on those inevitable snowy days! Must order a couple from Amazon tomorrow. Like the sound of The Intelligent Investor (Graham, updated Zweig) but not sure it does much on charts. Your recommendation for a chartist book which digs beneath the surface, please?

Eric

EWR:
Once again I am in agreement with john, I would not buy MPH yet, although your assement is spot on and I agree with you.

One of the first books on charting I read was " Charters on Charting " a small book but very good, unfortunately out of print at present, but you may find a copy in the library or at Amazon, (Author David Charters, ISBN 0 948035 21 8) if not available email me your address and I will loan my copy if you wish. The bible is as before "Technical Analysis of the Financial Markets by John J Murphy ISBN0-7352-0066-1 a heafty tome costing upward of 40 quid, which I got from the Library for 2 outlay. SD

Eric: Re MPH, let me add to my statement, I look for at least a 3:1 ratio, so if your calculations suggest a better risk/reward then so much the better. The charts suggest it may find a support level at 26p'ish, but I would want to wait for a number of charting signals to go positive before I would enter a trade..this I think increases the chances of getting a positive trade. After all there is nothing worse than entering a trade only to see it fall, regardless of the fundamentals. I only trade what I see, as against what I might expect to happen. Still that is just my approach after going through a lot of trading pain in previous times!!

Re Books, I think 'The Intelligent Investor' is a great read, and you should take it with you to Whistler, especially as it is not too heavy! You may also want to read 'The Midas Touch' by John Train if you do not already have it. I recall it saying how useless TA is! Re TA Books I suppose everyone has their own favourites, but the ones I turn too more often than not are 'Technical Analysis of Stock Trends' by Edwards and Magee. Another volume (bought it several years ago) I enjoyed especially for the detailed probability section is 'The Encyclopaedia of Chart Patterns' by Thomas Bulkowski. After reading Tom you will start searching for all sorts of patterns!! I have the books suggested by SEADOG and they are good as well, so I am just adding to the list really. I think John's book is really good if you trade Commodities as I do. Now these latter books are heavy so you may need to leave them behind for your trip.

Now as for ASOS I think some recent media coverage about Xmas Internet shopping being so successful this year will work through into the SP soon, and we may start moving towards another BUY signal soon!

Enjoy the day...John

Eric,

Still backing MPH, although i must admit to taking some profits last week! Feel the sp will rebound at some point and start motoring back towards the 30p mark, problem being is all the negative sentiment around the stock at the mo, think a lot of confidence in the company was lost last week after the RNS.

The price has drifted from the mid thirty's and the charts don't look very encouraging admittedly, imho this is due to the fraud deal and the volatility of the sp in the short term. The RSI is looking weak and until some news is released regarding future acquisitions etc feel its a case of sit on your hands and wait!

It was only a month ago that mph revealed a great set of results and future growth of the company looks strong, should imagine this will be on everybodys watch list and when the sp gets going again theyll be a lot of punters jumping back on board..

Hope Im right!

dawsinho:
Noted that 1 Director bought 50k of shares in MPH on 1st Dec at 29p.

Seadog,

From the rns:

"Michael Morris acquired 75,000 Shares on 30 November 2004 for a consideration of
27.5 pence per share and a further 100,000 Shares on 1 December 2004 for a
consideration of 29 pence per share"

In the last month we've had four rns, Great results, directors buying, new stores and a spat with boateng. Can't help this fall is well overdone. If you look at this company and imagine where it should be in one year, think the current price is a steal... Any other thoughts would be well recieved?

John, dawsinho, SEADOG

Good to see ASC back over 80p. This is the third time that we appear to have the inverse trading pattern to that I identified early last week when the price was falling; i.e. initial rise, subsequently selling dominating but price staying up. I say 'apparently' because I think the 100K trade sell will be a buy and the 50K ? will also be a buy.

Agree dawsinho re MPH. Must be near bottom so have decided its time to strike. FHNWFL principle (clue: seduction technique!).

Thanks for book advice - just going on to Amazon.

John: Having problems with Blue Index. Whatever I say about striking best price, they inevitably trade at upper limit of spread! Advice please, MG (my guru!).

Eric

Eric: Have you told BI (Blue Index) that you are not happy with the prices. You should tell then that you are watching the prices on-line and feel you are not being given a fair deal! See what they say and you can then see how you feel. Remember in all this that you might also want them on your side when market events suddenly take a dramatic turn, and you have an open position!

John

John

Have told them that, thanks - and apologised for getting cross!

legend

Fantastic show with BNH. Definite danger of you breaking the winner's tape first! ASC doing well but, whilst a throughbred, it is bred to stay rather than win a sprint!

Eric

Eric,

FHNWFL principle.... you'll have to help me on this one, don't have a clue!? Good luck with the holding. Sp has took a beating over the past month or so, lets hope we get some news regarding the fraud deal etc soon.