Zak Mir – Fallen Heroes: SXX, QPP, AVN

Apart from being a weatherman, Prime Minister, (and, until recently, editor of a magazine) the other ambition I had in younger days was to be a song writer. Yes, really! The closest I get to the latter is coming up with titles and themes for articles. Today’s concept album therefore is Fallen Heroes, consisting of Sirius Minerals (SXX), Quindell Porfolio (QPP) and Avanti Communications (AVN).

Taking Sirius Minerals first and, admittedly with the benefit of hindsight, it can be asked at this stage now both the chips and the share price is down, why did the company choose to employ valuable resources in arranging deals regarding future sales of potash BEFORE the planning consent was delivered?! If it was so keen, it could have started to sign off with potential customers as soon as the white smoke of permission for its proposed £1bn Yorkshire mine was given the go ahead. But , knowing how expensive bagging deals can be (lawyer’s fees, hospitality etc…) surely it would have been wise to wait?

As far as the charting position of Sirius Minerals is concerned, now we have the stock below the previously suggested “panic point” of 20p, and even below the former March support at 18p. The risk is that as little as a weekly close back below 18p could lead to the old 2012 floor at 13p – even though the shares are currently heavily oversold after an extended M shaped reversal chart pattern has worked its magic.

Quindell Portfolio (QPP) became something of a bears favourite over the Spring, off the back of intrigue regarding its share swap structure. In fact, it would appear that the company is rich enough to shake off any liabilities in this respect, or so management would have  you believe… However, the mystery on the charting front is how the stock has now reversed the 10p bear trap buy signal from June. On this basis, one would suggest that at best, the shares are due to consolidate between 8p and 10p ranges of the past couple of months, with the worst case scenario a partial or even full retest of the May support zone under 6p intraday.

Finally, there is the sad case of satellite communications group Avanti, where one could certainly say that we have been receiving mixed messages on the fundamental front. But, since the breakdown through the rectangle formation / bull flag break of May at 280p, only one message on the charting front is apparent to me now, and this sell.

Indeed, once the pre May 280p -320p range was broken, only back above 280p on a weekly close basis would have cancelled the prospect of a sub 210p 2012 support target. In fact, as things turned out, the bears were treated to a more pleasant surprise than they might have expected.

The position now in the wake of an unfilled July gap to the downside is that at least while there is no end of day close back above the 10 day moving average at 161p that we have the risk of a fresh leg down for Avanti and the 2012 price channel floor at 120p on a 1-2 month timeframe.