Just a quick one..
What do you get if you take a stock that’s rallied, a Big Round Number, and results that are nothing new?
I’ll give you a hint.. think back to Warpaint last week.
The answer is the stock usually falls.
And that’s exactly what we had with Kitwave.
400p is the BRN
Now, don’t get me wrong.. I like this business and think it’s a good operator.
It’s a rare 2021 float that’s actually done well.
But what matters is price and where price is potentially going to go next.
Here, we can see KITW moved from around 340p all the way to 410p.
News comes out that’s not ahead, and gives a cautionary note.
So what do we have?
Big move in anticipation of news
Big Round Number at 400p
News not ‘ahead’ and cautionary
Potential profit takers
Sound familiar?
Warpaint London (W7L) also had a big move, the Big Round Number, and potential profit takers (unfortunately I closed my short for a profit before the placing!).
Trading is a lot about pattern spotting and trading those patterns with good risk/reward.
I whacked KITW and covered for a quick dip.
My rationale was simple.. nobody is buying the news - especially after that move. And so all you need is a few profit takers for a move.
Deltic (DELT)
Here’s one I missed..
