Market indices 20/50 dma - UK, Dax, US - update 23

So, the ECB's Draghi delivered what the market wanted to hear, at the very least a verbal bazooka that will still need action to follow.  Can't help but think that we have been here before, there will still need to be concerted action by various Government's, all of which have to take into account the little matter of getting re-elected at some stage.

Bankers don't need to worry about getting elected, they just concern themselves with getting caught out. Still, there is an old saying in the US that you shouldn't take on the Fed, that probably applies to other Central Banks as well.  They have the ammunition, well, a printing press, to do the job and the nature of the inflationary money system is to always put things off into the future.  It's no good arguing that they are simply kicking the can down the road to an eventual destructive end game, because the road itself isn't a dead end, like an motorway/autobahn/highway (take your pick) it goes on endlessly. Still, the markets seem to like this inflationary money, as long as most of it heads their way. The potential downside, which no doubt the market will also complain about and want an immediate response to when it happens, can be put off into the future. 

As to the charts, all those potential breaches of the 20 and 50 dma that looked on the cards in the last update, are now looking reasonably bullish again, as you might expect after yesterday's big moves.  The 20 dma on a couple of charts touched and then bounced up again.  The FTSE100 was under the most pressure and still looks the weakest, but could be braced for a new push towards 5800 and 6000 again.  

Public Sector Portfolio Watch - Update 3 - May Gurney profit warning

Been a while since looking at those companies that rely heavily on public sector spending.  AIM company May Gurney came out with a profit warning this morning that so far today has sent the shares down around 44%.  This tells us a couple of things about how quickly the share price of some companies can fall very quickly.  First, it relies heavily on one source of income, around 60% from the public sector.  Second, as a smaller company the share price volatility can often hit hard and fast on the downside, many small investors in this company probably don't even know that the share price has fallen today. They will get a shock when they return home from work and check this evening and probably wonder what has happened. Some buy and hold fundamental investors in this share who rarely check their portfolio might not find out for weeks.

Key words in company reports, still effective indicators?

In his book The Naked Trader, how anyone can make money trading shares, Robbie Burns highlights the secret Naked Trader traffic light system using a tool available on the financial site ADVFN.  In brief what this does is to look for key words in company news, statements, reports, announcements, etc with the intention of looking for positives and negatives.  This can then be used to find companies to both go long when positive and short when it is negative.  NT has apparently used it over the years to great success and using such words when searching for trading and investing opportunities is a useful weapon for all investors and traders to take note of and make use of. 

Ashtead Group, today's FTSE250 flyer

FTSE250 Ashtead Group is one of those companies that is worth following if only because its business is essentially a reflection of what is happening in the wider economy, both in the UK and elsewhere.

It describes itself thus;

Ashtead Group is a leading provider of rental equipment with operations in the US and the UK. We provide equipment that lifts, powers, generates, moves, digs, supports, scrubs, pumps, directs, ventilates, whatever the job needs. We rent equipment so that our customers can focus on what they do best rather than maintaining and servicing equipment they may use only once a year.

http://www.ashtead-group.com/

I suppose that it is possible that it might actually do better during bad times rather than when the economy is booming as companies decide to put off purchasing equipment and instead decide to hire it.  On the other hand, being one of the biggest plant hire firms in the UK and the US, it is in a prime position to be a go to company at any time, in both good and bad economic times.

Video market round up for week ending 31st August

A week ending round up of the markets from Steve Briggs YouTube channel.

This week's video also takes a look at FTSE100 mining company Eurasian Natural Resources. Is it going to £2.00? Currently around £3.00 and a long way off its highs, back in 2008 this one reached the dizzy heights of around £14.00. Perhaps there is a lesson here of what volatility and big downtrends can really mean and why the longer time frames should be used and respected for investment and trading decisions.  

More videos can be found at http://www.youtube.com/user/sjb5555. Well worth having a look.

Monitise - Full Year Results 04/09 - update 2

AIM company Monitise, previously mentioned here and here are due to announce their final year trading figures in an update tomorrow.  Given the numbers in the recent trading update, the market is probably not expecting any surprises, at least on the downside, when the final figures come in.  As can often happen with smaller companies a good statement can see the share price rise rapidly while a bad one can see it quickly go the other way.

Smaller companies sometimes have the habit of disappointing often at the last minute, there's no reason to believe that will happen with Monitise, most of the news flow has been fairly positive recently. It will be interesting to see if they have anything new to say, additional contract wins, ahead of expectations, etc.

So far Monitise hasn't made a profit, we may well find out more tomorrow as to when that might be.  

Market indices 20/50 dma - UK, Eurostoxx, US - update 22

We start the week with a little sign of weakness beginning to creep in on a number of indices. The 20dma is under pressure on the FTSE100, Eurostoxx and Dow and both the 20 and 50 dma look like they are leveling off slightly, although the general trend is still up. However, this is a simple analysis and given the delay in confirmation that one tends to get from a 20/50 dma crossover, it is important to be looking at other indicators, chart patterns, support and resistance for signs of strength or weakness in the price action. By the time any 20/50 dma crossover has happened to the downside, if and when it does happen, the chances are that the market will have been in a general downtrend for a few weeks before these dma's catch it.