Colt - 2005 New Year, New Highs.............

Tone - too much reliance is placed is placed on technical analysis. Yes it has some importance but all too often it is used in a selective way - sometimes deliberately, sometimes inadvertently. If you look at the chart from July 2005 onwards, when the sp was 67p, you will see a significant downward sloping trendline. I believe this was the essence of Biswell's case for saying the sp would drop to 50p. To my mind his analysis demonstrated a lack of understanding of the wider picture which unfortunately technical analysis can all too easily mask. As I said in a previous note, if you go back to July 2004 and strip out the price movements due to trading activity then you are left with an investment trendline which is sloping upwards - with anchor points of approx 40p,50p and 55p. Its interesting how the sp refuses to break below 55p. If the fundamentals continue to improve (recent news from the company points in this direction)this investment trendline will continue to slope upwards.