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!!

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.

dawsinho

Faint heart.... lol. Fundamentals fine, so over-sold means opportunity. As you have taken profits, you could win twice by buying in again.

Eric

Eric,

Going to watch and wait, feel confident the sp will recover. Just finding it hard to understand why the big drop! Think the lemming effect has taken over a little!

Happy hunting

dawsinho,

'The big drop' in my opinion was only the traders taking a tidy profit. and why not, the share had shot up. I personally saw it as a buying opportunity. Bought in at 72.5. So its looking quite good unitl Christmas - where I think it will pass its high and go towards or near the 1.00.

abe_levy,

Was refering to MPH...! lol
Very happy with ASC, i'm long this one. Will be holding tight unless we have some bad news etc! Think the one pound barrier will come around Jan time coupled with a nice trading update.

abe_levy

dawsinho and I had shot off at a tangent as MPH, a member of the ASOS Challenge Portfolio, had fallen back significantly after good results. I was exploring opinions re taking out a cfd because fall clearly overdone. johngtudor, our leading guru (got to keep him happy!) gave as a criteria a 3:1 ratio of upside to downside. My calculations said 5:1 so I have a nice little position.

The main point of dicussion re ASOS is whether it will hit 1 before Xmas or in the New Year. Being a cautious sort of bloke (what's that lol noise, I hear?) I am going for a trading update slipping out in the New Year. Also there will be publicity for launch of Miss Sixty range. Should be way ahead by time of results with launch, also, of own label with potential for improved margins.

Eric

EWRobinson

I thought that CFDs were only traded on larger companies. Can you trade CFD's on companies such as ASC or MPH - and if so with whom? Thanks.

abe_levy

blue index. Generally, 3:1 multiple on small cap, including AIM. 4:1 on Alizyme (AZM). Still learning how to work with them; you really have to put a limit on the buying price, unlike your broker who you can trust to buy at best (hopefully!). Takes a few days to set up. Don't think I would go smaller than MPH: there needs to be a reasonably free market in the share. It seems to me that MPH is ideal (as ASC) because the next results are pretty well assured as their winter collections are 85% delivered and we are clearly still in a spell of continuous growth and good news flow. Look at discussion in earlier posts, particularly johngtudor.

Eric

EWRobson.

Thanks. I am going to look into MPH.