Conviction Buy- List Review

Its been more than a month since I put together my conviction buy- list and I think its time we reviewed the featured stocks.

1. Coop Bank (COOP).

   

   This one is painful.. I had to sell this stock when it broke its MA (50) support since it represents, in my opinion, a failed breakout. In my conviction Buy- list post back in June, I referred to a “cup and handle” pattern that had formed on COOP. in traditional technical analysis, this patterns is considered a basing pattern that once resolved is usually bullish. A break above that handle (consolidation zone) is the buy signal. Well.. In the days and weeks that followed my post, COOP was not able to break above the consolidation zone. The stock broke its MA(13) support and continued selling off finding temporary support at EMA (30). We then witnessed some sideways movement before COOP finally broke and closed below MA(50) support on Aug 21st. That was my sell signal since that moving average was my last level of support. Since breaking support, COOP has continued to sell off and with the daily RSI now firmly below 50, am out of the trade, and will wait for prices to settle and begin trending up.

    
    

2. Centum Investment Company Ltd (ICDC)

   

   Yet another one bites the dust. Its beginning to look like my conviction buy- list is turning into a sell- list.

   ICDC ‘s chart tells the tale of a stock that could not break out above its recent high. We did not even get close to the sh. 20 price target that I had set on July 2nd. Instead, the stock began to roll over and gradually sell off. Well ICDC broke the 200 day moving average support and closed below it. This to me is where I call it quits and sell the stock especially because the stock is trading below all its moving averages and plus the RSI is now setting new lows. These are all signs of weakness and there is no telling just how low this thing will go so for now, am a seller of ICDC.

    
    

3. Mumias Sugar Company (MSC)

   

   And its MSC to the rescue.. MSC is still in an uptrend. Since its breakout above the MA (200), it has continued its steady advance with few rests in-between. I still like MSC as a buy and will take any weakness as a chance to load up on some more shares. One thing I would like to see is MSC taking out its recent highs (Sh. 7.40); besides that, support is holding nicely and we are firmly in a confirmed uptrend in MSC.

    
    

4. Access Kenya (ACCS)

   

   In the conviction Buy- List post back in July, I indicated that ACCS was due for a pullback and that I was a buyer at any pullback. Well, we did get the pullback and a significant one at that. Prices have since broken every level of support and just today we witnessed a break of the 200 day moving average support at Sh. 20.68

   With ACCS closing below Sh.20.68, am weary of buying any more shares. Should we get follow-through weakness next week, then that will be my sell signal. Its still too early to know if this break of support is a sign of further weakness ahead but one thing that’s clear (at least to me) is that my warning bells are ringing though am still to pull the sell trigger.

    
    

5. Barclays Bank Ltd (BBK)

   

   On July 2nd in the Conviction Buy- list post; I noted that-

   “Barclays seems to be consolidating around the Sh. 55 level. It should be noted that that price level acted as significant resistance earlier this year and it makes sense that the stock should stall at this level. There is overhead supply at the Sh. 60 level”.
   

   Subsequent price action proved the analysis to be spot on. Notice that after stalling at the Sh. 55 level, BBK sold off for 3 consecutive days finding support at MA (13). After this selloff, the stock turned around and made a move towards the Sh. 60 level and tried to break above this price level for 3 consecutive days but was unsuccessful; that my friends is what we call a REJECTION!!. What followed after this failed attempt was a selloff that has continued to date bringing BBK back below its 200 day moving average support which is at Sh. 47.28 With the stock closing below this support level for three consecutive trading days; this to me spells out a SELL. I do not know how low this will go but one thing that I do know is that once a significant support level is broken, then watch out below..

    
    

    
    

    
    

    
    

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~ by Ade on August 28, 2009.