The Faraj List of Exploding Stocks Part 3.04 (FAR3)

This time last year, quite a few of us on this thread were embarking on what proved to be a very profitable short-term play – namely: Stanley Gibbons (SGI).

Personally I had quite a large position by my asset allocation formula, so I was quite happy to bank a rapid 30%. It equally rapidly transpired that I had sold far too soon, still, I moved on to other profitable plays, so I won’t “Job Backwards” over a bad sale.

Anyway, SGI remained on my Monitor & another 40% turn went a begging when they took off again in June. The chart since then may be tweaked by some parties as in August the share price was adjusted for an 8p “Special Dividend”. Still, as we all know, other than stock selection, timing is the most important facet in successful investment. For an end-March buyer still holding today, the chart below shows that SGI will have proved an adventurous but relatively poor performer.

But my view on the chart is that we are once again building up for another profitable run – c.45% over the next Quarter. I haven’t yet taken the advanced charting school course (New Year’s Resolution for 2005 – allocate the time to learn how to paste charts with overwritten trendlines!!) so might I ask one of the resident experts to assist with the following:

# 50 & 200 day MA
# May/Sept/Nov uptrend
# May/Nov downtrend
# Mar & Aug resistance across the peaks

Assuming the MAs hold, as they appear to be doing; and we get a bounce back through the recent downtrend – a close at 85p will do nicely – then an equal run to the rise from May’s 66p to August’s 105p gives us 39p on top of the break – 125p which just happens to coincide with the projected upward resistance line @ c. 1st week of April!!

All seems a bit neat. But to my mind SGI does indeed look a very healthy Risk/Reward play; and I would certainly welcome the views of others. In the meantime I’ve opened my account @ 83p.

SUPERMUM, you didn’t like my recent recommendation for MLC, but what do you think of this one?