zak mir on explosive AIM action in COMS, BLNX & QPP, sleeping cabinet ministers & Robbie Burns’ hairstyle!

Unless you are asleep, or perhaps a member of the Cabinet, you cannot have failed to notice that in recent days there has been explosion in the price action of key AIM stocks. This has been a favourite area of the stock market for me for quite some time. What helps drive the enthusiasm is the way  that AIM combines all the regulatory characteristics of the Wild West / Putin’s Russia with intense speculative interest from punting private investors.  The stocks particularly in focus at the moment are Blinkx (BLNX) after a rather disparaging blog on the company last week, old favourite Quindell Portfolio (QPP) and Coms (COMS).

Taking Blinkx first and it can be seen from the daily chart that there has been something of a rollercoaster ride here in recent days to say the least… What didn’t help out too much is that on the day of the share price collapse the internet media platform group took its time in putting out an RNS addressing the negative blog, and by which time the stock had already fallen as much as 50%. But of course, as a technician, such fundamental fluff is secondary to what is going on in the daily chart. To my mind the key to the picture is the former August 124p intraday low. On the day of the big breakdown when the stock fell as low as 85p the old August floor was coming in as new resistance. However, the shares did manage to end the week back above this number. This suggests to me that at least while there is no end of day close back below 124p (perhaps allow wiggle room to 119p) one would expect an attempt on testing the 200 day moving average at 151p over the next 2-4 months. Such a bounce is called too, even if there is subsequently a retest of the 85p low of January.

Interestingly enough Quindell Portfolio and Coms are not only two of the most hot / rallying stocks around at the moment, both have been recent longs (from much lower levels) as published on the website (http://nakedtrader.co.uk/trades.htm)  of Spreadbet Magazine contributor and my hairstyle hero, Robbie Burns!  Looking at the daily chart of Quindell over the past few months it is not difficult to see how this could be such a compelling bull situation, over and above the blink and you missed it dive below 6p at worst in May 2013.

The position now is that while we have probably seen the best in the short term, there could still be a “final” near term spike for February. This is anticipated on the basis that the rising trend channel on the daily chart from the end of June has its resistance line pointing towards 34p. While this may not be a great risk / reward for those not already in the stock, it may be worth hanging on if you have been long from lower down – for instance Mr Burns went long at 18.7p on December 30^th.

Finally and in Coms, we have another Burns sizzler in that the great man was a buyer here as recently at 6.8p on January 28^th. Given that the stock peaked on Friday at 9.7p this is already a big winner. What will be interesting now is whether there is the scope for any further upside towards 10p and above? This is the key question given the way that the top of a rising December 2012 price channel is at 9.5p and the RSI is at 90 /100. You could expect a pullback towards 7.5p – 8p initially, even if the stock was able to spike higher after that.

FOR MY NEW FREE TOP 5 SHORTS BOOK, PLSE CLICK BELOW FOR YOUR FREE COPY