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Big_Bad_Bear
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Any good short tips? I was going to post yesterday as I have shorted GSK and RIO but RIO has plummenged nicely although I think 1450 is a good target so further downside for a short term trade.

Also CHS is as good as a dead cert as it gets. What about BB.? Discarding the annual bid rumours with an upside risk to 400p, what odds on 265p at some point this year? I'll have some. Others, MONI, DCG etc.

I have a feeling this will be a bear year but I'm hedged as ever.

Latest one is short CAC, long FTSE and also short Nasdaq, long Dow although that has also made some ground. I feel there is more to come so I will hold with stops for a bounce.

Bush rally? Huh, it's finished.

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Just opened my IG Index account. Nice to be able to go short, although intially I think I'll just use it to hedge my long positions.

CWD has short plastered all over over it. Retailers could face a hard time. FCCN and MKS imo will do well to avoid many more downgradings. UTF won't be selling many conservatories now that the housing market is crashing are still valued at £60m and have just used all their cash to pay the divi...

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Mildly disappointing figures from Next and Woolies this week. Definitely tough times for retailers. I would expect these two stores to have done as well as anyone on the high street.

FT summary:

London hit by fears of falling retail sales

By Michael Hunter, Philip Stafford and Tony Tassell

Published: January 5 2005 08:52 | Last updated: January 5 2005 17:49

Retail stocks were again the main talking point in London on Wednesday, as mild disappointment from a Next trading update raised concerns about the fortunes of other retailers during the important holiday period.

The FTSE 100 closed down 0.8 per cent at 4,806.0 while the FTSE 250 index was down 0.9 per cent at 6,915.5. Volume was 2.9bn shares.

Next, the fashion chain which has a strong record of performing well in the Christmas period, trimmed its full-year profit forecast by £5m to between £415m and £425m after its end of season sale failed to clear as much stock as anticipated. Next was down 3.2 per cent at £16.21.

Traders feared that if Next could not meet expectations, few other retailers could either. Dixons, the electronics retailer, shed 3.5 per cent to 150p while GUS lost 2.3 per cent to 928p and Boots was down 2.2 per cent at 634p. Marks and Spencer, the high street chain, lost 1.7 per cent to 338p, hit by rumours that it would bring forward its trading update from next week.

The source of the speculation was widening spreads on M&S's bonds, which led to fears that news from the company was imminent. Traders' sensitivity to M&S's bonds stems from last June, when retail entrepreneur Philip Green made an approach to the company. The first indications of the approach appeared in rapidly widening bond spreads.

Reuters slipped further on vague market speculationof a disappointing trading statement from the global information group next week.

In a thin day of stock-specific news, Reuters softened 2.08 per cent to 364½p on talk among some dealers that its trading towards the end of last year had been hit by City cost-cutting. The stock is down 3.4 per cent this week.

Analysts said doubts had been growing over the recent trading performance of Reuters but the rumours were likely to have been driven by speculators.

Similar downbeat rumours proved to be unfounded last October in the run up to Reuters third-quarter results. Reuters's shares jumped 8.5 per cent after the results which were widely judged to be solid rather than spectacular. One explanation for the share price rise then was that large number of investors with short positions had to quickly cover their losses.

Elsewhere, Investec eased 1.7 per cent to £16.68 after Geoff Miller, a leading analyst on the stock at Bridgewell, reduced his recommendation on the stock after its recent sharp run. The stock has rallied 81 per cent from an August low of 920p.

“The discount to the investment banks sector has disappeared and although the shares remain at a discount to our fair value estimate of £17.83, they are within 10 per cent of this target,†he said.

Mr Miller said the shares may consolidate in the 1500-1700 range until further details are released on the merger of Rensburg and Investec's Carr Sheppards Crosthwaite.

Sector peer Charles Stanley rose 2.27 per cent to 270½p on vague talk of a tie-up with UBS. The stock, up 4.4 per cent this week, has seen some heavy recent trading volumes although the rumours were downplayed as wide of mark by people close to the UK broker.

Cookson eased ¾p to 35¾p despite a research note from Panmure Gordon arguing there was trading opportunity to pick up the stock ahead of a company update expected on January 18.

Oliver Wynne-James, Panmure analyst, said Nick Salmon, the chief executive of Cookson since July, would present his views on the future of the conglomerate.

“His options range from disposals, to cost-cutting, to plant rationalisation, to greater business focus or most disappointingly to maintain the status quo,†he said.

“Whatever the direction, the market should welcome an element of change.â€

Stanley Leisure fell 11.54 per cent to 381¼p after warning “unfavourable sporting results†had affected its core betting operation along with a winning streak by a “major playerâ€. This had led it to reduce its expectations for its full-year profits.

William Hill dropped 4.8 per cent to 555p in sympathy.

BOC, the chemicals group, was down 3.64 per cent to 979p and drinks maker Allied Domecq shed 4 per cent to 503½p as both stocks went ex-dividend.

Tobacco stocks were weaker after CSFB highlighted some mixed data on the European sector from research group AC Nielsen. Gallaher slipped 1 per cent to 903p while BAT fell by the same percentage to 903p.

Premier Foods, the maker of Branston Pickle, dropped 1.63 per cent to 270½p after it revealed a fire at its Bury St Edmunds factory flattened its full-year sales growth.

Management Consulting Group firmed 14.43 per cent to 55½p after forecasting that its full-year results would “moderately†exceed expectations.

Michael Page fell 5.56 per cent to 178½p after Deutsche Bank cut its rating on the recruitment company from hold to sell and its price target for the stock from 190p to 147p. The broker cited the company's exposure to lower economic growth.

Highway Insurance jumped 15.6 per cent to 40¾p in reaction tonews that it was in preliminary takeover talks.

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  • 3 weeks later...

IC 21-27 Jan edition suggests 13 smart shorts:

AstraZeneca

Colt

Crest Nicholson

Eurotunnel

Lastminute

LogicaCMG

Manchester United

WM Morrison

Reuters

Shire Pharma

WH Smith

Topps Tiles

Xstrata

I don't agree with all of them. As ever DYOR!

My top tip for a short has to be Conservatory roof maker Ultraframe (UTF). This company has already lost 90% of it's shareprice in what has been the largest property bubble in history. Now with a slowing housing market, no more MEW = dead in the water! Short this dog down to 1p.

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  • 2 weeks later...
  • 2 weeks later...
  • 1 month later...

Any of our resident traders have anything to add to this thread? Having a bad week so far with my longs, and the markets have turned bearish for the time being. I don't like to short normally, but having some hedges makes a lot of sense especially on days where the FTSE falls 1.2% like today.

Slowly but surely CWD is coming down. It's hovering right on the rising trend line, and could either fall through or bounce. Today was xdiv I think, and so there's very little reason left for holding this stock. Looking for a lower high as a short opportunity.

Taken out a short on PRU, which has risen 30% in the last 4-5 months to test 12 months high, but couldn't manage breakout and started to fall. Big sell off today, losing over 3% (and sister stock AV. too).

Also looking at EZJ. Recent uptrend has petered out and going sideways now, looking at possible 10-20% retracement. High oil price will pressure this and BAY/RYA also.

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IC 21-27 Jan edition suggests 13 smart shorts:

AstraZeneca

Colt

Crest Nicholson

Eurotunnel

Lastminute

LogicaCMG

Manchester United

WM Morrison

Reuters

Shire Pharma

WH Smith

Topps Tiles

Xstrata

I don't agree with all of them. As ever DYOR!

My top tip for a short has to be Conservatory roof maker Ultraframe (UTF). This company has already lost 90% of it's shareprice in what has been the largest property bubble in history. Now with a slowing housing market, no more MEW = dead in the water! Short this dog down to 1p.

I second Ultraframe, but my spread betters don't do them..bah!

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I have short PRU and have had to put up with some pain of late but got paid today!

I like to run my portfolio as a hedge. At the moment I have more shorts than longs so the last couple days have been welcome. I like to be long FTSE 250 shares and short 100 shares as it gives me an edge at the mo.

I will adjust my portfolio to be long or short biased depending how I feel on the market. At the mo I think shorts may be in for the foreseeable and then a bounce mid to late April.

We'll see.

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Cheers BBB,

Glad to see that I am not the only person who thinks PRU are overbought. I've read that only about 4% of traders/investors regularly go short, although I'm not sure how accurate that really is.

Most of my longs are in smallcap shares which are very loosely correlated to FTSE movements. I'm finding that I don't like the day to day rises and falls of largecaps just because of what mood the FTSE takes on a particular day. I don't mind the wider spread on small caps either. You generally have to expect to be able to gain 7% annually to cover the interest charge anyway, and I generally think smallcaps offer much BETTER risk/reward than largecaps when you factor in the leveraging.

Shorting is good though, as the interest charge works in your favour.

AZN may be another who're overbought short term. I've lost money going long on them before. Maybe it's time for payback. Rubbish fundamentals, too, which is always nice.

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I always use quarterly bets for longs to avoid the 7%. You do pay roll over but wise trading can mitigate this. Watch out for those drug stocks, they are very news led. I agree that AZN looks a dead duck, particularly with all the generic drugs coming along but beware. I like a long GSK, short AZN hedge when the figures permit but I won't be doing it yet.

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Guest muttley
I always use quarterly bets for longs to avoid the 7%.  You do pay roll over but wise trading can mitigate this. Watch out for those drug stocks, they are very news led. I agree that AZN looks a dead duck, particularly with all the generic drugs coming along but beware. I like a long GSK, short AZN hedge when the figures permit but I won't be doing it yet.

BBB,not sure I'd like to go long on GSK.From April 1st they have been forced to cut prices on many of their out-of-patent drugs in the UK.Also,their antiasthmatic drug Serevent,has been receiving a lot of bad press in the US.It has begun to impact on prescribing in the UK.Total withdrawal would be bad for share price.

I don't know if these two pieces of information have been factored into the share price,but thought you ought to know.

BTW,I'm a pharmacist.Serevent prescribing is definitely down.

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Cheers, always nice to have info from those in the know. My long GSK/short AZN preference is a pure hedge based on the fact that the market LIKES GSK more than it does AZN. Thats the most important thing in the short term. My hope is that GSK will outperform AZN over a certain period. I'm not that bothered about the actual market performance of the sector.

As I say, I'm not in the hedge at the mo. I want to see how the market deals with the recent results for a month or so.

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Guest muttley

I think that Astra's range of drugs is quite good.Symbicort and Nexium in particular.The one BIG downside is Crestor.This was meant to be massive,but it hasn't displaced it's rivals.Again,I don't know how much of this is factored in.

I tend to avoid pharmaceuticals,though I am currently looking to buy more Alliance Unichem (if the price dips a bit).All IMHO,DYOR etc

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From what I've read AZN's drugs pipeline (sounds like an illicit drugs factory!) is pretty bare compared to GSK's.

Been looking at charts for FTSE-100 companies.

CW. just formed a stonking double top and about to break down below it's recent low. Another who've risen 30%+ since Oct.

Agree SDR looks like a stonking short now.

RTR looks very toppy, but not a decisive break downside yet - same can be said of most FTSE-100 stocks.

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Got shorts on PRU, EZJ, CW., and all three looking good. Sell off in EZJ looks brutal, down 8% in the last 2 days on heavyish volume. Mild resistance @ 198-200, but high oil price should take this out without too much effort and then down to sterner test @ 180. PRU, essentially a leveraged play on the FTSE. Good results from FP. saw the whole sector up this morning, but slid throughout the day. Big position, so not being too greedy - looking for a 460ish exit here. FTSE weakness on monday should see these guys down more. CW. Is there a duller share in the FTSE? Mild resistance @ 118-120ish, but could easily go back down to 100 if the markets stay weak.

Having a hedged portfolio definitely makes it less stressful fearing which way the market goes, IMO. The current sell off has not been kind to anyone with just long positions on bluechips.

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Guest muttley

Boots got another mauling in the Sunday Times today.

Incidentally,I got a visit from a AZN rep on friday,and she reckoned that Crestor had been cleared of any problems,and sales were expected to rise.(The selling point of this drug is that it is effective at much lower doses,hence fewer side effects)I will let you know if things pick up.

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  • 3 weeks later...

Okay, got mullered on PRU (Bloomer sacked.. 3 days after I opened my short. Who could've known), and EZJ up bigtime after great March figures, although I closed out early and avoided the worst of the rises.

Still holding CW. short, but that's up too. Other than that I'm holding all long positions.

Not to be detered, still scouring around for some decent shorts.

Any thoughts on the following:

CAP (Capital Radio)

SLY (Stanley Leisure)

Both look like a couple of duffers to me, although midcaps, so shorting against the index to some extent.

REG (Regent Inns) looks ripe for a fall, now the recovery has run out of steam.

SDR forming a textbook pullback to the neckline now on the back of a strong market this week. Could fall fast from here.. opening my short very soon.

Edited by Van
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  • 2 weeks later...
Guest muttley

Does anyone have an opinion on Manchester United? (The company,not the football team)

Malcolm Glazer has been given a May 17 deadline to "put up,or shut up"There seems little upside,compared to the possibility of a Glazer withdrawal.

I reckon Fergie will retire too!

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  • 2 weeks later...
Guest muttley

Amazingly Dixons shares rose after yesterdays gloomy figures.The City were clearly expecting worse!

Shorted Pilkington (PILK) today.I'm expecting only modest falls.

Does anyone have any info on Inchcape (INCH). Meteoric rises based on auto sales. <_<

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