Conviction SELL List
In response to my good friend Richard’s comment, I worked on putting together a list of stocks that i would avoid based on their technical’s. This list is by no means exhaustive, rather a “work in progress”. Am sure in the days and weeks to come it will change as the market provides us with more insights. Please remember that am a trader not an investor and my opinion of these stocks is solemnly based on their price action as revealed in the charts. Also bear in mind that my analysis is solely based on stocks trading in the Main investment market.
Without further ado (I’ve always wanted to say that to an audience.. Guess writing it will have to do) here is my SELL list galore..
-
Olympia Capital Holdings Limited (OCHL)
This stock takes the top price. Not only is its chart seriously broken, but the stock is practically trading at its 52 week low . There has been no up trend and the selling has only intensified lately.
This stock is practically on a free fall. Both RSI and Williams %R are in oversold territory with the RSI just recently moving below the 30 level. There is practically no support left for the stock.
From a weekly perspective, OCH has been in a serious confirmed down trend since October and the last remaining weekly support was taken out last week. Perhaps news of OCH misfortunes with their Botswana based subsidy was the proverbial “push over a cliff” – I will leave that debate to the fundamentalist. As far as the charts are concerned, this stock is in serious trouble and could gradually continue down that slippery slope to the stack market graveyard.
-
Rea Vipingo Plantation ltd (REA)
REA has broken every level of support recently and is now threatening to break that all important Sh. 12 level. The stock has enjoyed a nice move higher from the March lows of Sh. 10.00 but is now showing signs of weakness.
Weekly support was broken last week with a close below the weekly SMA (15). Its important to note that at current price levels, REA may attempt to fight its way back above that support level – an effort which I expect will fail.
-
Kenya Re-Insurance Corporation Ltd (KNRE)
This is probably one of my more controversial sell candidates. The stock broke its 200 day moving average on Friday but fought its way back to close right at it. Should we see KNRE move below the Sh. 12 level, then expect to see an accelerated move lower.
Weekly charts reveal a break of the weekly SMA (50) support. Notice also that we have had 3 consecutive down weeks. I expect we will see further weakness ahead especially once the Sh. 12 support level is taken out.
i have to agree with you on your avoid list, first of all it’s important to look at what Olimpia capital role is in the capital market, Olympia Capital Holdings Limited is a holding company. The Company, through its held companies, manufacture and sell floor tiles, adhesives and curtain tracking products, as well as investment holding activities., the red flag comes right there in that, this is a holding that depends on the performance of other companies, looking at the majority of the companies that Olimpia holds one would expect them to be doing better in the current wave of construction in Kenya, that’s however seems not to be the case, even further their earning per share is not very appealing, 0.51, this is not good, they also have a dividend yield of 0.000%, this is not what investors would like, i however think that the next few months will be critical for this holding company to do better so as to stay competitive. Looking at the businesses that most of the held companies engage in, i think this stock might have some potential in coming years to shrug off the negatives and even be a hot stock in da market.
i also happen to agree with you on Kenya Re, i was at once a firm believer of Kenya re activities, however is very clear now that most investors question the state owned cooperation viability, matter of fact Kenya re had the most sell of last week
to me is more of investors wondering how profitable is Kenya re gonna be in the future, the reason is say this is because the fundamentals of this cooperation says something different from what we seeing in da market, for example their EPS is pretty good i would say 1.21, they also have a P/E: 10.21, so to me its just the investors questioning their future, lastly the fact that they have two subsidiaries( Wedco Limited and Kenya Re Properties Corporation Limited,)that are dormant doesn’t help.