Hi
Just looking for thoughts on how you determine what a future share price may be and what metrics from the stockreport you use to help in evaluating this as there is so much information and estimates it would be great to get your opinions
Thanks in advance
I never have any set plans personally. Obviously it would be nice to think every share one buys would hopefully say generate a 25% positive return in 2 years but natural variability on most shares is massive compared to expecations - some may double in price and some may lose 50%. I think there there is more than one way to skin the cat with regard to strategy.
Personally i simply monitor the price and compare to the news comig out of the company.
For example Norcos and Somero have both roughly doubled in price since purchase/last top up. Particularly with Somero i would have been more than happy banking quick gain of 50%. What has happened with both companies is that they have both had multiple positive market updates over the last 12-18 months - so the price has not spiked on no news (at which point i may have sold) but the shareprice apprecation is due to the company doing better than i would probably have hoped for s they have upgared expectations beyond what i was expecting - being honest both companies have knocked it out the park with norcros being perhaps the company of the two that i perhaps more expected to perform as they have done - so i remain happy holder of each.
In summary i constantly evolve my expectations as each trading update arrives. I tend to sell when shares show signficant appreciation on no specific expected good news. Eg fevertree was my number one holding - shareprice spiked when others were falling and i sold out completely . and if i had to cull something now it may be BP marsh as that price is up with events.
I do try though nowadays like to run my winners more so particualrly where prospects are good and news is good or not bad i am not looking to really sell in a hurry , so i am hoping that if the companies i hold prosper long term i may be in for the long ride. I tend to have the odd share i see as being long term core and dont want to sell - but in some respects covid/supply chain issues and inflationary issues perhaps say that looking to long term may not be the sensible thing to do if a company is in for tough times short term (eg whetehrspoons). You cant beat a quick gain though - buy - up 20-30% on no news and bank your profit to recycle - those are the good uns where perceived value has outed quickly.
I do similar on the downside - boohoo has had issues but share price is down more than i think compensates for the bad news released so i wil continue to hold.
Unfortunately all very unsceintific - i know many use trailing stop losses and religously topslice - if i was gonna go down the scientific route that sounds like reasonable plan to me.
Although the worst of all worlds is buying good shares that temporarily drop 5%/10%/20% and you always end up selling at the bottom. I don't see an easy answer here - other than having ones skeptical hat on with all shares - if the sniff aint right possibly better to cut losses and stand on the sidelines. Just look at the amount of decent companies that have had large pullbacks recently - some of which now have clearly turned the corner.
You also want to watch out for liquidity and spreads. Some shares are easy to get in and out of - the less liquid ones are more dangerous as you probably have larger spread to overcome to make your profit - so i do factor in how hard a share may be to sell at top dollar buy price.
rmillarree
Thank you for your detailed reply, appreciate it, I generally take a quick look at historical support and resistance levels and look for a minimum of 25% open ended depending on news flow, I do hold a few multi baggers which is nice and I do like to hold for a long time unless the story changes
Just curious for those that use technicals to arrive at a future price and what metrics they use
Once I've bought a share, I often have a mental stop loss of 10% or so from entry price. if it triggers, I tend to sell half and top up again if I can get a better entry and if I feel the share is worthy getting in at a lower price than I originally bought. If price falls a further 10 % or so from that 2nd purchase, I tend to get out of that share completely for a while.
I don't like holding shares which have fallen more than 20% or so. In the past I've held onto some which have fallen even more and committed the cardinal sin of topping up on these and ended up making a bigger loss when they haven't turned to the upside.
The further the share price falls, I find it becomes harder to admit defeat and crystallise a large loss, so I get used to taking smaller losses. You can always buy back into a share, and you won't get it right every time, so don't let a few large losses ruin the gains.
I tend to let winners run until 8 day EMA falls below 20 day EMA. Sometimes following this approach, a share can move substantially until this event occurs. I've had some very good gains last year on MPAC and STEM amongst others following this method.
I think we have all help on to shares that have gone down more than we would have liked I know I have and still holding a couple, but at least they are small holdings and the dividends have overtaken the downside
I like the thought of the 8EMA and 20EMA, may take a look at this, and I am wondering if the 20EMA crossing the 50EMA may also work
I like a minimum target price of 25% but I am considering increasing this, but may limit my selections, which I guess is no bad thing
