Over the last few months, I have had a few successes with what Minervini calls power plays. These are stocks that go up by 100% or more in an eight week (or less) period, then consolidate/correct without correcting more than 20-25%, then finally move back up and through their high (at the top of the initial increase). The buy point is just above this high ideally on good volume.
I've had a few successes with this: Ocado and Bahamas Petroleum have been the most obvious examples.
I've been watching Sosandar (LON:SOS) for a while now since it hit a high of £0.36 on 23 July. It has since corrected about 25% (£0.27 on 3 August) but has now rebounded strongly with a huge rise on Friday. My hope is that it now tightens up for a few days before bursting through the £0.36 buy point when I plan to buy.
I know that there are a few who are in this already and I usually stay away from stocks that have an overly active ADVFN group (which SOS has). However given the good company in that group, I'm going to make this an exception!
Let's see if we get that breakout.
M.
I bought Sosandar (LON:SOS) some months back at 15-16p level. Its not my type of stock historically but I have been experimenting and pushing into higher growth and/or quality names....now Sosander isn't quality and with only top-line and no mid to bottom line growth worth a mention its hard to call it a growth stock too. But, I'd been looking at Boohoo (LON:BOO) and fashion retail in general high street and online and felt that Sosander was the interesting name with a good targetable and scalable niche with 30s and 40s women.
However, I only bought 1/15th of my normal full commitment scale...its an experiment after all and I felt that there was so much to prove out with such time sequencing issues that its near 100% likely that I will get a much clearer signal at some point in future if I follow and know company decently to build a fuller position. If I'm lucky my little stake grows and means I don't need so much cash to top up.
Today, I think there is so much to build out and the need for more cash so high that I will be given the opportunity to probably top up my holding at a discount to the current price on a capital raise. IMO the price today looks super toppy. With a pure momentum stock it may well double again for no particular reason.
I'd compare this to an early stage exciting tech stock. One where the technology has been shown to work but the commerciality and the path to commerciality are still to be executed.
Those are my views...I look on with interest to see what I can learn.
Ciao, Paul
