Zak Mir’s Midweek Missive – 53 quid a week and directors dealings!

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Apart from the weather, the highlight of the Easter break in the UK just had to be the comment by Iain Duncan Smith that he could live off £53 a week. Now, I am sure that the Secretary of State for Work and Pensions could indeed survive for a week or two (and likely lose a few pounds in the process), but if he thinks he could do this on a sustained basis then I fear he is more of a fool than I thought!

Amidst the kneejerk reaction in the media, there is perhaps one point that has been missed though and that is given that the average Briton works until nearly the end of May each year (Tax Freedom Day is May 30th) to pay off their tax burden, isn’t it rather said that such efforts can only lead to £53 a year as a safety net?

I have tried to search on Google how much of every Pound we pay in tax actually goes to the causes it is supposed to, but I guess much less than half survives various “admin” charges such as Government, the EU, the tax collection process, and general wastage – regulators, defence, banks, NHS Trust Managers et al. It would appear that taking a punt on the FTSE 100 or letting someone else other than the State look after our welfare would be a better course.

As far as the mid week stocks focus is concerned, the theme is director share trading, and how much of this shows up in the charts. For instance, in the case of speculative “favourite” Ruspetro (RPO) – so far a one way bet to the downside from the IPO, we witnessed an almighty rebound at the end of last month and which is gaining momentum again today. This gave the impression that the insider buying (CEO and President and Non Exec’s collectively) could be a sign of lasting recovery or at the very least, success on the debt negotiations with Sberbank. It may be so, even after the three day failure to clear the blue 50 day moving average now at 34.5p (although it is having another go as we write now). For the bulls, they can take comfort also in the fact that former February intraday low at 25p has held as support this morning.  This is a big positive for the price action, as a bear trap is implied was created this morning. However,  for cautious / fearful traders it may be that only a clearance of the aforementioned 50 day moving average now at 34.5p on a weekly basis may be required  to convince them that what has been a brutal situation has, finally, turned the corner.

For credit checker Experian (EXPN), a Chairman share sale looks to be relatively innocuous in terms of him simply reducing his stake – a case of lightening the load near the top of the stock’s recent trading range, particularly given the recent acceleration to the upside. The expectation on a technical basis is that at least while there is no end of day close back below the green 10 day moving average now at 1,151p, that there could be a decent leg higher. The favoured destination by the end of next month is as high as a rising trend channel from July last year at 1,250p.

I may have saved the best for last in terms of the contrast between the CEO and FD share sales of their entire stakes in Sports Direct (SPD), and what appears to still be a relatively solid charting picture.  This may be because over Christmas sales were up over 20%. What can be said at this point is that given the way that the shares managed to survive a £100m placing by the colourful founder of the company Mike Ashley at the end of February, you might have thought that a few million raised here subsequently would be small beer.

So far this looks to be the case in the sense that on the daily timeframe there is a rising trend channel from August. The message at the moment is that while there is no end of day close back below the former 2012 intraday high at 417p there is every chance the stock shall retest the February 450p plus resistance zone. This was achieved just before the Newcastle United owner trimmed his holding to 64%. Ashley is left with just enough petty cash to stage a decent  50th birthday bash this year, and patently does not yet need to concern himself with the logistics of 53 quid  a week!


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