... down and out in Eastbourne and Grenoble ..

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14th Jul '14 by stupormundis

7 comments 5446 reads

Does anyone know why this Company has bombed in the last two trading days ,,, I can't find any explanation for the bizarre fall in price over the last few days. Part of the problem with these European stocks is their almost complete absence of press coverage. This looks like a terrific little company, had a good write-up ten days ago and all it does is go south.

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About the Author

Stupormundis

Premium Member

7 comments

PhilHofGrowYourDough

14th Jul '14

Hi,

This announcement today might explain it ...

(CercleFinance.com) - GEA (Grenoble Electronics and Automation) shows a turnover of EUR 7.25 million under its third quarter 2013 to 2014, compared to 19.2 million in same period a year earlier. specialist electronic systems for motorway tolls says his level of activity in the third quarter confirms the slowdown in the pace of automation programs in France since the start of the year. 'It also reflects inertia and the difficulties encountered in connection with the redeployment strategy started in the direction of the international '.

translated from http://www.tradingsat.com/gea-grenoblelect-FR00000...

Hope that helps

Phil

stupormundis

17th Jul '14

.. thanks for that. I have had some successes with European stocks but the gains get reduced by losses such as this. I think the moral of the tale is (1) to be ruthless in my stop losses and (2) to reduce European exposure because of the paucity of information and its inaccesability .. think I am going to keep my activities to the UK and US in future ..

cig

17th Jul '14

Being ruthless with your stop losses is not generally a good idea, as you'll be taken out on any temporary gap (when the price collapses for a few seconds or a few days, and immediately recovers).

PhilHofGrowYourDough

17th Jul '14

I use Ichimoku Charts to help with my stops (http://www.ichimokutrader.com/)

My stops are notional stops that I check in the evenings and act upon the next day.

GEA Ichimoku Chart

I dont like the look of GEA's chart and even if the screening parameters had come back ok with it I still would have struggled to pull the trigger to buy at any point on this chart (perhaps with the exception of November). The break out in late January was so strong I probably would have just let it go as a missed opportunity.

In terms of selling I would have been watching it like a hawk as the price action consolidated into the bullish cloud (green) and hopefully I would have sold as it made a clean break out of the cloud in early June.

In Ichimoku charts the clouds form as a result of price consolidation and they provide strong support and resistance. Any break of that support or resistance is seek as significant. The thicker the cloud the more consolidation and the harder it is to punch through it.

If I've made a good profit on a stock or if I'm overweight I'll sell a portion as if it starts to dip into the cloud.

As I use an integration of Value and/or Growth allied with Momentum when buying I find it works for me but might not be for everyone. I basically exit the party if the Momentum disappears as I dont believe I'm clever enough to accurately value a company. I'll let the market work that out and slip away quietly as things start to lose impetus.

Each to their own.

Best of Luck

Phil

DJLJ23

17th Jul '14

I agree, Looked at buying european but really struggled to get information as i like to try and understand the business not just the historical figures and brokers forecasts.

PhilHofGrowYourDough

17th Jul '14

Some are going to find this very challenging indeed ...

however I have to say that on the whole I do very little digging into my stock selections. I avoid certain business on ethical grounds, e.g. I discovered a nugget of a European share that was in the adult entertainment industry recently and decided to pass.

However I digress ... You see I'm prepared to admit that perhaps I'm not as clever as those smart city boys (funny though their fund performance doesnt seem that clever) and that more information doesn't mean better investment decision.

I do read the last two reports and ala Naked Trader I look for positive news. Over and above that I rely on my screens to select High Quality, Value and/or Growth opportunities that are exhibiting Momentum (both earnings & price).

Some will not work out and I cut them using Ichimoku Charts to guide me

Others will truck along quite nicely thank your very much.

I'll reduce winning stocks as they test the Ichimoku Cloud and sell out as they break down through the cloud.

I will exercise some discretion here if the wider market is taking a hit and give a 'good' stock a chance to recover.

I apply this approach to my UK and Euro stocks and hopefully US stocks when the Stockopedia service is launched.

Maybe my approach seems ludicrous to some however I put my money where my mouth is and my portfolio is very closed mapped (in terms of selections rather than value) to my Phil's Stockopedia fund. It's currently running at an annualised 38% return after 18 months and that's excluding dividends. My target is to recover back to 40%. (The down spikes in the chart are Stockopedia data errors rather than price movements)

Perhaps I've been lucky, perhaps my approach suits the current market conditions. Time will tell.

This approach has developed over time and the key moment was seeing the graph associated Robbie Burns Naked Trader Strategy (the UK version is running at an annualised performance of 31%). A solid, smooth consistent growth, with little drawdown, generating plenty of selections in diverse sectors. I've been refining that approach through my screens including the QVM ideas and the recent 2% Stock Rank revelations highlighted by the Stockopedia team.

Plenty of people here will often talk about their buy/sell approach

Others will highlight increased dealing costs of European stocks, exchange rate charges and with holding tax.

I encourage them to setup a Stockopedia fund and demonstrate the efficacy of their approach and to beat 38%.

Finally above all find an approach that works for you.

Best of luck

Phil

PhilHofGrowYourDough

17th Jul '14

Here's the Ichimoku chart for GEA (courtesy of IchimokuTrader.com)

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... down and out in Eastbourne and Grenoble ..

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Stupormundis

7 comments

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