Monday, 20 October 2014

Quindell obeys technical playbook

A week ago, I said that Quindell (QPP:LON, or £QPP) was entering an oversold condition below 125p and would bounce. What I omitted to say is how far, which I should have done, as most technical analysts would say that for a downward sliding stock is that when it bounces an oversold condition, it will recover half-way to the last high, and this is exactly what has happened.

£QPP textbook technicals


From the 13th October high of 166.50p, down to the last low of 123.72p gives a recovery point of 145.11p, which is where it reached on Friday night. I was waiting for this and placed another short, my previous one having been sold at 125p as per my last blog post. Note I could have gone long on the bounce, but I didn't dare, given the second GCR tweet and lent-out percentage of 97.58%. There is another GCR tweet today, by the way.

Sure enough, the instrument is back on it's path downward again, and of particular note is the long-tailed candlestick at 8am this morning, which reached down to 38.2% of new high-low, viz 132.15p. Interesting, isn't it, how these fibonacci points are so accurate. This gives me a clear first target for my short, ie it will try to get there again. (I have to say by the way that the 2p recovery in the last hour today was unexpected, but it doesn't change my view)


£QPP new Fibonacci projection 

In summary the trend is still down, and I will continue to short rallies. I have so far, using spreadbetting, made my stake several times over. I believe this stock is following technicals exactly because there is no news either way on the GCR/Shareprophets allegations.

I have noticed, incidentally that in the last eight weeks, the downward channel range has tightened. See the chart below. The range is now within the blue tramlines rather than the black ones.

£QPP narrowing tramlines
Unfortunately for bulls, this doesn't help, as although the tramlines are narrower, they are at the same gradient as the old ones.

As an aside, I am amazed by the amount of emotion generated against people who are bearish on this instrument. It's just a share, like any other, where you follow price/action. I cannot understand why people who are holding long-term write to bulletin boards every day. I am a long-term holder of Minco (LON:MIO) and Fastnet (LON:FAST) and am well underwater, but I know they will come right in the end. I certainly don't care about people shorting them. Also it is extremely unlikely that retail shorting has any effect on any share except micro-caps (with >10% spread!). If only it did - you'd never lose!





10 comments:

  1. Impressive 9% gain today by Quindell, after ROBLE closed their short. Still a short for me.

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  2. Wow now trading @ 161p (up 14%). Hope your open short is not hit with a margin call - ouch!

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  3. Well closed today @ 162.5p (up 15.6%). If I were you I would get that short closed - quick - ahead of Roble.
    quote from above:
    "From the 13th October high of 166.50p, down to the last low of 123.72p gives a recovery point of 145.11p, which is where it reached on Friday night. I was waiting for this and placed another short, my previous one having been sold at 125p as per my last blog post. Note I could have gone long on the bounce, but I didn't dare, given the second GCR tweet and lent-out percentage of 97.58%. There is another GCR tweet today, by the way."

    Bet you wish you had gone long @ 145p?
    There is always tomorrow though...

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  4. Seems that Roble SL only closed 10% of their short position...they still have 4.5% short.

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  5. Dave is just playing the charts. He's not part of the coordinated gang. He's just following in their wake. He's a very clever guy...but it doesn't mean he is right on Quindell. To do that he would need to understand the business. This stock should dead in the water with everything that's been thrown at it but its far from that. Today showed clearly that being short here is a very dangerous game

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  6. Dave I've got some charts on QPP if you wana have a look

    Steve Cooke A- U- L manchester

    steven.cooke7@ntlworld.com

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  7. Nice to see that with all the financial resources behind them compared to the 'man in the street' investor they have further reduced their short..

    latest from FCA today shows Roble reduced now to 4.28%

    perhaps they are more clever than the 'pundits' that are now opening shorts
    of course make up your own mind...

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  8. 169.61 let's see what happens from there it's a bit early yet to get bullish on this

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  9. David Atherton writes on 20/10/14 "Also it is extremely unlikely that retail shorting has any effect on any share except micro-caps (with >10% spread!)." - See more at: http://adatherton.blogspot.co.uk/2014/10/quindell-obeys-technical-playbook.html#sthash.U9qegcn9.dpuf.

    Why does he trade using shorts? Surely the same pattern would apply to long positions? Would this not be a more positive attitude and avoid the stigma attached to shorting? Or, is his comment a load of bull...t.

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    Replies
    1. I trade short on QPP because the price keeps going down. I trade long on other shares because the price keeps going up.

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