Ocado: Power Play?

Saturday, Feb 24 2018 by
9

Ocado (LON:OCDO) is not a share I would normally consider but it has popped up on a Minervini Power Play screen. Minervini looks for 100% share price increase in eight weeks (it took nine weeks for Ocado) followed by a consolidation/correction period where the price corrects by no more than 20-25% in 2-6 weeks.

Ocado (LON:OCDO) has corrected by about 21% (550-432) and is now moving back up. I will be buying a small position if it breaks out above £5.50.

Does anyone else have any experience of this kind of play? Any thoughts on this potential play?

M.


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Ocado Group plc is a United Kingdom-based online grocery retailer. The Company's principal activities are grocery retailing and the development and monetization of Intellectual Property (IP) and technology used for the online retailing, logistics and distribution of grocery and consumer goods, derived from the United Kingdom. The Company offers end-to-end operating solution for online grocery retail based on technology and IP, suitable for operating its own retail business and those of its commercial partners. The Company's brands include Ocado, Ocado Smart Platform, Sizzle, Fetch and Fabled. Sizzle is a kitchen and dining store. Its beauty store is in partnership with Marie Claire. The Company's Ocado Smart Platform is a solution for operating online retail businesses. The Company's Ocado Smart Platform combines its end-to-end software and technology systems with its physical fulfilment asset solution. more »

LSE Price
793p
Change
-1.2%
Mkt Cap (£m)
5,554
P/E (fwd)
n/a
Yield (fwd)
n/a



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18 Posts on this Thread show/hide all

poughtibridge 25th Feb 1 of 18

No experience yet, but I'm working through his books - keep us updated how it goes.

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maffs0 26th Feb 2 of 18
1

I've just taken a small position at 526p with a 493p stop. I'll be looking to increase the position if it hits 540p.

M.

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sirfrank 26th Feb 3 of 18

The only stocks appearing on my Powerplay search are SQZ and ZOO.

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maffs0 27th Feb 4 of 18

Nice start to this trade. I've now doubled up at 533p and left the stop for the whole position at 493p.
Will be looking to add a final position if it breaks into a new high (540p ish).
M.

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ricky65 28th Feb 5 of 18
1

I'm not a fan of Ocado (LON:OCDO) here. Extended from the base. Run up fast and steep. ATH resistance ~620p. I'd be looking to sell into the strength and bag the profit. Good luck with it!

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maffs0 2nd Mar 6 of 18

Thanks Ricky for your thoughts.

This is certainly not a LTBH for me, more a swing trade based on a "power play". The power play requires a fast and steep run up! I've risked 40p on the downside and hoping for for 80p upside (£6.15). It's held up really well during the correction so far. We'll see.

M.

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ricky65 2nd Mar 7 of 18

In reply to post #332748

Looks like a good swing trade thus far if you bought your initial position at 526p. Well spotted and played. Interesting to see if it breaks the ath ~620p. I like to play these kind of steep gradients by selling into strength and not waiting for a break as they often come down at a similar steep gradient.

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nigelpm 6th Mar 8 of 18
3

Big fat director sell - the valuation is utterly insane - good luck momentum trading it but when the music stops...

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maffs0 6th Mar 9 of 18
1

Didn't think this would be your cup of tea, nigelpm!

The sell is horrible news but the remarkable thing is that the price has been up both yesterday (when he made the sale) and today (when it was announced). That suggests to me that there is massive demand for this share and limited supply so I'm happy to hold. The thing that is concerning me is that the last two days saw the price come back in towards the close so its certainly one I'm watching like a hawk.

This is a swing trade for me...looking to get into the low 600s with a 2:1 reward:risk ratio (stop set at £4.93).

M.

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nigelpm 6th Mar 10 of 18

Short interest will be keeping it up - for sure.

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maffs0 9th Mar 11 of 18
4

The share price has continued up nicely and worked out as I had hoped. It is looking very extended now so I've sold half for a 10% profit in 2 weeks and moved my stop to breakeven for the rest. I think it has further to go but risk is much higher now.

This is my first attempt at a power play. Does anyone else do this regularly? Any screens you use?

M.

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bwakem 9th Mar 12 of 18
1

The CEO sold £24.3m @ 540p last week. How other people can think it is worth more than the CEO's get-out price is something I don't understand.

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maffs0 9th Mar 13 of 18
3

In reply to post #336033

It's "worth" what people are willing to pay for it and right now the chart suggests that there is strong institutional buying with demand outstripping supply. As long as that continues, the price will keep going up.

The amazing thing about the CEO sale as I said earlier in the thread is that the price kept rising through it. His stock was easily hoovered up and the news of his decision to sell hasn't stopped the rise. That's what happens when a stock is being accumulated.

M.

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maffs0 22nd Mar 14 of 18
5

Got stopped out today at breakeven on the 50% I left on the table. So a small 5% gain on the trade, not what I had hoped but a profit is a profit.

M.

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ricky65 22nd Mar 15 of 18

In reply to post #343548

maffs0, sounds like a good trade. As I said on the 28th Feb, it was quite extended from the base so I thought limited upside. Failed to break the ~620p ath this time. I see multi-year resistance points fail a lot, overlooked by many imo. Anyway, it's all so easy with the benefit of hindsight!

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underscored 17th May 16 of 18
1

Wow!

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DaviStoVest 17th May 17 of 18
1

Indeed! I read the story (sounded wonderful) ... I looked at the numbers (appeared to be a company without real substance) ... but I rode the Ocado wave for a while and stopped out at what seemed a decent profit (happy at the time).

Another glorious failure (among several) in my relatively short (three months) history as an investor! What I would have made today on Ocado if I had continued to hold would have been about half of my total gains to date across all my other holdings.

Hey ... but I am still up by about 5% on the total cash I have dribbled into this venture since mid-February (IRR must be well over 25% p.a.). No point in fretting about what might have been.

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underscored 17th May 18 of 18

In reply to post #365144

Yes you must know why you are holding. Have a plan and stick to it. Don't get distressed when something outside of your plan happens...

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