Big Hitters hanging in there

My search the “Big Hitters” is not a standard search on the program but can be easily written in Unisearch. The search is designed to find undervalued shares that are growing their earnings both aggressively and safely. It’s been very good to me in both the UK and SA over my 5 years experience with the program.

The parameters are

1. RV >=1.4
2. RS>=1.2
3. Value/price>=1.05

At present I am sorting these shares by VST (Value, safety and timing).

All 5 shares that I am holding at the moment are Big Hitters shares and I am well pleased with the performance of all 5 in this dull market. Avon in particular has done well with GOG turning upwards during the week. Barratt is trying to break for the fourth time. My mentor MR Gann always believed that the market would break on the 4^th attempt. All five I believe will do exceptionally well if the market can break upwards next week.

You may remember that towards the end of June this year I came up with a search to find small cap shares on the LSE and AIM. This was for a talk that I was doing with Zak Mir at Zakstraderscafe. The search named Small Cap Rockets was written to look for shares with a market cap of less than 500 million that had a RV of greater than 1.4 and a CI of greater than 1.4. CI is an unsung here of VectorVest. The Comfort Index, on a scale between 0 and 2, finds shares in the throes of a strong trend with little volatility. A high CI finds shares that have the ability to resist severe and lengthy price declines.

I am happy to report that the four shares I selected in the June 26^th blog from that search are doing well. One was Avon rubber which is both a Big Hitters stock and a Small Cap rockets stock. The Character Group is trending well and I note that Capital and Region has just broken above 60p which was a strong resistance level. The latter should do well from here. If you need a search that locates aggressive trades then the Small Cap Rockets may be the one. The charts of Character and Capital and Region are shown below. The green line above the price is the VectorVest valuation. The ascending triangle on Capital and Region looks particularly attractive.

 

 

As always the general market is 70% of the exercise

During the week past there was several green lights in the price column of the color guard but I decided to get the data out of the way and haven’t bought any more shares. As stated last weekend I am 50% invested.

 

The VectorVest Composite stalled for three days last week as markets waited for data, the so called Super Thursday and the US NFP number. Carney surprised by hinting that rate increases were further off than the market anticipated and the Cable tanked a nanosecond later. That’s the reason I suppose that the UK market strongly outperformed the Dow last week. The US numbers were good and largely as expected. Based on these Yellon should act in September.

 

Both the Ft100 and the VectorVest Composite have stalled at a 78.6% retracement of the last daily range. That’s where the smartest and bravest bears have their sell orders. The highs of the day for the last three trading days have been defined by this level.

 

The Dow fell after the NFP on Friday. The data was good as expected and that means a September hike is likely. The Dow fell to a low that was defined by the down sloping line that technicians will recognize as a falling wedge. This is a bullish pattern with a magnificent risk to reward ratio. In my short term trading I am long of the Dow from the lows of Friday looking for a bounce next week. If I am right there are mega points in the trade and if I am wrong I will lose a few. It will give me lots of opportunity to add to this little position on the way up if the trading Gods smile on my position.

 

I will be happier when the Composite closes above the high of the 20^th of July. If that occurs then this wave up that I seem to have been talking about for months is happening at last.

 

I will add some more Big Hitters shares when I see the Color Guard print a green light during the course of the week ahead and will discuss the shares in question during the Q and A session at 130PM on Monday afternoon at 130PM UK time. This will be recorded and support will have a link.

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David Paul

8^th August 2015