Hi,

A bit of background ... I've been interested in blending value and TA concepts for quite a while. I've found it very useful to read value posters, particularly Paul Scott, however I've come to the growing realisation that I need to take greater responsbility for my selections and I feel that TA related concepts can help me time my entries and exits from value stocks.

Having read Naked Trader I found the combination of value and momentum appealing. To that end I've created my own version of the Naked Trader Screen. I want to point out that this screen is only a starting point for the screening process. I'll still want to read up on company announcements, study the charts, look at price targets (using Point & Figure charts), potential support points, consider risk/reward ratios.

However, here are the basic screen rules based on Robbie Burns' basic criteria and the results of that screen ...


I then explored these companies in more detail trying to get an understanding of their business and by checking recent company announcements as I'm trying to get a perspective on their potential. After reading up on the last two statements from each company I excluded Rank (LON:RNK) & Diploma (LON:DPLM). I've then examined the Point & Figure charts for each stock to get a better feel for the texture of their trend. The only stock that didnt make it through this analysis was Savills (LON:SVS), which I rejected due to the recent strong drop off new highs (See the figure to the right).

I then analysed each stock using Point & Figure Charts looking for price targets. Point & Figure price targets are generated by the price action itself. As a result some stocks won't generate a price target and that was the case for Cineworld (LON:CINE) so I put it to one side for now. I then considered technical support levels for each stock and this enabled me to produce risk reward ratios for each stock. The results of this analysis are shown in the table below…

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