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!!

Minx, moneyplus.

Year ended 31st March. I assume that Minx is basing his timing on the new warehouse going live in May. ASOS have been unusually quiet - licking their wounded pride? When you have had a year of terrific growth and success, galling to have to give a profit warning. Considerations as I see them:

(1) The problems were of a one-off nature as they failed to cope with the volumes at Xmas due to splitting stock over 4 warehouses and failing to bring some lines to market at all during the season. Apparently, the systems couldn't cope either as they can no longer have had visibility of their stock. This led to high sales in Jan and Feb but low margins. These problems are clearly in the price.

(2) What is happening? First, enquiries are holding almost at the level of the Xmas season based on the Daily Reach figures; approx. 200 per million. Chartis update on post 1139. It would seem reasonable to assume that spring trading is going very well. Obviously this is too late to affect 2004/5.

(3) ASOS have been in the habit of giving a trading report on a quarterly basis. So we might expect preliminary figures for alst year from amangement accounts during April together with a trading update. I would expect this to include some encouraging news.

My assumption is that the Xmas trading problems were a blip on a rapidly increasing trading and eps profile. Interested that Minx has closed his short although there has not been sign yet that Evil has closed his. Probably a good buying opportunity. My problem is my overweight position in SEO so my holding in ASC is currently just average. We need to watch this share closely.

Eric

I think you are absolutely right Eric. Although the chart remains in a downtrend, the SP has bounced twice now from Support at 48p. Although an indicator that gives the most false signals the 10MA has once again intersected a rising SP. But of most interest, the Bollinger Bands are narrowing indicating an imminent move, and from the MACD perspective, there is clear evidence of a Bullish Positive Divergance, (the most reliable MACD indicator), and a Bullish Moving Average Crossover, (albeit just). We only need a Bullish Centreline Crossover and all three indicators will be present. This is certainly not a stock I would want to be shorting at the moment. However, if the SP dips below 44p, all bets are off.

Regards

PTH

From the chart, it's not time to buy yet at all. The SP and the 25dma and the 50dma have all struck decisively down through the 200dma in sheer southerly formation.

I would wait until SP breaks up through at least 25dma, probably 50dma and possibly also the 25dma through the 50dma before sniffing at taking on more stock (you know how us dogs like to sniff the bottom of the market, he he!). To be sure, to be sure, to be sure as our friends in Dublin might say, wait for all three to break up through the 200dma with all four heading north again!

I continue to hold (having reduced a little at the 58p level a few weeks ago).

SD

Peter

Personally, I prefer to link consideration of the charts with teh fundamental position. In the new year the sp was on a demanding rating which was OK whilst the upward trend remained. The January trading positions showed a drop in margins in Christmas trading which started the weakness which turned into a slide with the profit warning on 3rd March; the share became a shorters paradise, led by Evil. As you say, the market has found a support level at around 48p. Could the breakout from the current level be down? Unlikely as the cap is down to 35M. Whilst this is a pe on the forecast figures of around 30, this is likely to drop to around 15 in the current year, given the growth in trading volumes and prospective improved margins based on a single warehouse. There has been a hiccough in this success story but there is no reason to beleive that it is anything else.

Eric

SD


There may well be a little more time to sniff out the bottom, but I think you are wrong in that 'it's not time to buy yet at all,' for the reasons I have already given. I only made a passing reference to the 10MA, which could break through the 200MA very quickly and by the time the 50MA gets there, you will have missed out on the bottom methinks! Each to our own SD, certainly more momentum and voulme is required before anything startling happens and that will only be driven by a touch of good news.

PTH

The potential problem for your tactics are that there could be a sharp reversal on good news. The chart not shown that I like to follow is that for momentum; this seems to have bottomed out and could well be turning positive. May be arguing against myself as I would like time to rebuild a decent position!

Eric

eric, ptholden, you're both right in terms of the vertical axis of the chart on which I agree with you. I'm just considering more the horizontal axis - time! I think eric's fundamentals and my own expectations where we will be by Xmas coincide, subject to any adverse news not yet in the price. But do disagree there is any particular "support" at 48p - that's just where we ended up after a bad day. It could dip worse or it could not - quite impossible to say - before it goes up again, which I am prepared to predict.

So I'm just groping at any indicators that will tell me where the bottom of the market is to buy most efficiently linked with some assurance that it will not fall back again almost immediately.

SD

SD

With regard to support I was not looking at yesterday in particular, but more the Support established April (ish) last year. One may argue that has decayed somewhat, but perhaps still relevant. I think we are probably arguing about when to buy and not if! I'll stick a pound on a spread bet today and see what happens!!

Regards

PTH

keep meaning to find the time to organise a spreadbetting service - which ones are best? - but always too many posts to read and answer.

I have two accounts, one with Finspreads and the other IGIndex. The latter seem to cover a much greater range of products and in particular shares, although I am led to believe IG do not offer the best spreads.

Min bet size was a fiver for ASOS, so I'm off and running!

Regards

PTH

Well the 2*200K BUYS will certainly help the share price motor UP. Last time it was fidelity increasing their stake, could well be FIDELITY INCREASING their stake again....

watch this space.....topped up with some more this afternoon :)

ptholden - what views do you have on CMC - trading as Deal For Free, I think. They gave a presentation at the recent Traders Day. They claim to have the finest spreads and a unique rolling daily spread where you can run the bet over several days either paying a little interest (longs) or receiving a good deal less (shorts).

My own analysis is that the initial margin is irrelevant as a measure of cost of the bet (that's the big con for the innocent, letting them think their initial margin is the cost of the bet - IMHO). The risk is the amount you stand to lose if the SP falls (rises) to your guaranteed stop loss (which you must always use). So first calculate your stop loss price, then divide this difference from the strike price into the amount you are prepared to bet to give you the value per point you are betting. Close the bet when you have made your preset profit, however much further it might have gone.

Divide your capital at any one time into 10 portions, only betting 1/10 of it at each time, so that you can sustain several losing bets in a row if necessary. Each time take 1/10 of whatever remains (or has now increased) of your capital.

If you win/lose 50% of the time and only bet when there is a chance that your win can be at least, say, 2.5 times your stop loss, but in practice you achieve only 1.5 times, then on average you should nearly double your capital every 40 bets, no matter in which order you actually win or lose any given sequence of bets.

If you start with 1,000 and make one bet 200 days a year, after one year you should have about 31,000. If you manage to improve you wins to 2 X your stop loss, then you will make about 2.1m in a year - easy-peasy!

Plan the trade and trade the plan. Are these the rules you play by?

The one aspect I need practice at is how far away from spot price the book-makers tend to set the strike price. Presumably if we all know the FTSE is going to fall from 4950, then the strike price will be down at 4890/95 or something before you start. Is this correct?

One day I shall find the time to set up an account and start dabbling.

One last question - are spreadbets better/easier/more profitable than CFD's or what?

SD

sd: haven't seen a comparison and haven't looked seriously at spreadbetting. A key argument for CFDs is that it is very like trading the share except with a multiple built in which increases the expected profit (or loss) by that multiple. No doubt, some of the same principles apply: e.g. the 2.5:1 ratio of stop losses to target price; I would use 3:1 on CFDs. It might be helpful to think through a scenario for spreadbetting with ASOS and I can then respond with the CFD scenario. Suggest take an example based on todays closing spread and think the actions through.

Eric

Eric, currently I can't see how CFD's are worth it (being taxable and a more complex instrument) when you can roll-over spreadbets for as many days as you like. CFD's as opposed to spreadbetting strike me as a little like compuserve to other ISP's - they were there first when technology was a tad more cumbersome, but are now rather left behind. Don't mean to belittle your favourtie instrument which evidently serves you well, but if you were to start again from scratch (or even with a slight handicap - golfing joke) would you not go for the simplicity of spreadbetting?

You're absolutely right about the 3:1 potential - it is after all completely a percentage play that the 50% of the time you win is worth enough more thatn the other 50% of losing bets to make it worth the candle.

The best stocks are those with an established wave propgression through an upward or downward channel linked with added momentum from the general market indices in the same direction. Then you can really time the tops and bottoms to place your shorts and longs respectively.

all the best from your ever-woolly (never been squelched (yet!))
ramblerrambler

Need i say more? ASOS.com get it's HIGHEST EVER ranking

jusk looking to invest in ASC hopefully around the 45p mark... just have one concern: Cant ASOS be sued for copying desigs (as in copying clothes that celebs wear?)
E.g Monsoon sueing Primark over skirt design!!!

I may be totally out of the picture but would be gr8 if neone can clarify?

My guess is that the web traffic is up because they are having another 75% off sale.

Still selling furry boots, which doesn't really strike me as a summer item and it strikes me that they may be getting rid of lines prior to the warehouse move. Also, they are offering free delivery on sales over 40 again.

Overall, makes me think that margins are continuing to be hit - I think things the margins will pick up after september for the second half of the year.

http://www.timesonline.co.uk/printFriendly/0,,1-38-1578140,00.html

Jacques Vert rose 1p at 15p as its top three directors bought a combined 390,660 shares at 14p under an executive share-matching scheme. Asos eased p at 49p, despite talk that recent trading at the online fashion retailer has been STRONG.

Hitwise just done a report on the apparel & accessories category for UK online traffic. Next remains no.1 with a market share of 8.29%, with ASOS 2nd at 3.87%. ASOS' position has strengthened having slugged it out for 2nd place in throughout most of 2004 with La Redoute, Additions Direct and Figleaves. ASOS has been no.2 every month since November 2004.

Apparel & accessories enjoyed stronger growth in 2004 than many other retail categories In March 05 the category enjoyed 14% year on year growth in MARKET SHARE of visits. So ASOS is gaining an increasing share in a segment that is grabbing an larger share of overall internet traffic, which is itself growing fast thanks to increasing penetration of broadband. Not too shabby. Not too shabby at all. If they get their infrastructure sorted out, improve the sharpness of their buying (too much stuff has to be discounted at the moment) and keep signing strong partnerships like the Now! magazine tie up then this is an absolute winner.

marketmaker all comes down to margins the hitwise figs can be misleading which they were before xmas .cheers woodie