Zak’s midweek thoughts
Fresh from my appearance on CNBC the other week, I was invited to go on Bloomberg on Tuesday morning at 6:40 AM. Unfortunately, due to the location of my abode, this meant the taxi picking me up at 5 AM! A somewhat painful experience for someone who is not really a morning person…However, once I got to the Bloomberg HQ, somewhere near Moorgate station, it appeared that the six years that have passed since I last graced the channel simply melted away. Not only was I given a security pass with a 10-year-old photo of my fatter, younger self, but the anchor presenter was also one of the few people who remembered me from years ago. All I can say is that Mark Barton and the team treated me like a God. There is nothing so refreshing for the soul and the ego, as to get a big billing on financial TV, especially when you are as enthusiastic regarding the subject as I still am (and at an unearthly hour!).
Just in case you’re wondering, the stocks I discussed were Vodafone (VOD) as a potential “bottom fish” if it broke the year low at £1.64, HSBC (HSBC) as a roaring buy on the basis that money-laundering, tax avoidance, or even gun running are just not the moral minefield they used to be. The final recommendation was a U.S. company called Zillow (Z), an online estate agent of all things and which I feel could be a buy after a recent revenue miss.
Fresh material from today’s blog comes in the form of dollar / yen, where I personally would have bet the farm on a buy towards ¥82 a couple of weeks ago, and probably would have bought the farm instead given the dip below ¥80 there has been since… Nevertheless, the cross appears to have bounced off a near-term June trend channel floor just below ¥79 50. What can be said now is that while there is no end of day close back below the ¥79 level we should be looking at progress towards the previously hoped for target of ¥82 and through 2012 resistance.
As far as the stock picks are concerned, today I offer up AMEC on the bull side and where there has been a rebound off the floor of a rising trend channel from the beginning of June at £10.19. It is in fact yesterday’s price action, toeing an intraday high of £10.33 – which was the floor of the overnight gap up. We await a further rebound towards the area of the 50 day moving average now at £11.05. Hopefully, such a target could be achieved over the next week to 10 days.
As far as Fidessa (FDSA) is concerned, I am looking for a bear trap rebound to set in. This would be achieved on an end of day close today back above the initial October £12.98 intraday low, with the stock given added momentum to the upside by bullish divergence in the RSI window. Ideally, there would be no end of day close back below £12.98 prior to a test of the blue 50 day moving average at £13.93 over the next 3 to 4 weeks. The attraction here is of course that we are relatively close to the notional end of day close stop loss level.
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