Newsletter November 2005
Sometimes everything changes in a week. This time the
significant period was the month of October as it was in 1987. Without such devastating effect this time round, thank goodness.
Even with a strong last day, it is down over the period and what a sour change
in sentiment took over since last month end. Recent takeover fever has pushed telecoms higher but other sectors like household and retail are friendless. The
bad taste now is inflation. Just
below the surface over the summer, it is altering perceptions of stability.
Interest rates are in question again with upwards movement in Europe anticipated while the Fed continues it’s step by step
increases, possibly with more to come. The
October 31st was a brilliant recovery in all
major markets which followed the big rise of the Dow on Friday 28th. The rebound is strong but are we all
convinced that there is substantial support? Could be a second shoulder forming
now in the FTSE. The index will have
to rise above 5390 before we are out
of trouble.
New ‘lows’ in
Oil seems to have settled at a lower
average level now that the hurricane season seems finally to be over. The other
main commodities are still at high prices but with the dollar stabilised the
markets may enter a more tranquil period. November has definitely set off like
the gunpowder plot. With a surge if not a bang.
The flavour this week seems to be housebuilders. All getting rather
frothy, perhaps they have got a feeling that takeovers are in the air. Persimmon and the rest are either at or
testing new highs. Either this indicates traders expect a bid to materialise or
they believe interest rates will not
go higher for a time, which could breathe more life into a weak housing market. Last weeks news about
the huge jump in court applications for repossessions was a troubling but we
shall see what pans out. Last month we were not in a position to buy when Persimmon was at or around its 50day ema. It has since gone much higher and todays 30p rise takes it over £9 for the first time.
A sprinkle of shares we know have moved
significantly recently.
Airpartner has dropped to 570 or so and could be in the buying zone. Recent news
on the company was OK and a special 20p divi will be
paid on 1 Dec in addition to 11p final divi. The
chart is looking a bit weak having fallen through 50 day ema
and revisiting a support last seen early in the year. It is thinly traded as
usual and after the payment date it may steady up a little. Synergy has fallen back towards 200 level but news is sparse. Chart is looking very weak. 50 day
ema is going lower than the 200 day and the share
price has breached both. If it falls through 400p, it is likely to head straight towards our
stop loss of 370. Sadly, having stuck a tighter but not perhaps tight enough ‘stop
loss’ on Hamworthy a temporary fall forced a sell. We took
a substantial profit but now need to get a bargain entry point again if
possible. On a poor note, Langbar shares
took a knock when the company announced that it was checking it’s assets to see
if they all existed. Their shares remain suspended at 50p. A big riser today
was Redbus Interhouse my
tip of last month. Up 3p to 22.75p following news of a takeover bid of 23p by Telecity..
We are fast approaching Mobius AGM. On good authority I hear the auditors have given the annual accounts
their seal of approval which probably means we can continue to function for
another 12 months. We
hope to welcome Liane Benning to our club after her first meeting with a few
members last time out.
Mourads work on the website and progress
with domains will aid us in our objectives so it will be good news when all the
loose ends are tied up.
ML
Acknowledgements to Daily Telegraph
and FT.