The turtle value Unisearch on VectorVest finds undervalued shares that are growing earnings strongly that are breaking to new highs. It’s simple and it finds trading candidates each and every day.
The settings are as follows.
Value/price >= 1.2
Share recommendation = Buy
Price making a new high over 13 weeks using EOD data.
I then sort the shares by RV (Relative Value). RV measures the earnings potential of the share relative to the risk free rate.
Please add RS>=1 if you wish and also volume minimums to remove illiquid shares from the results table.
On running the Unisearch, today, the 18th July I am happy to see that two of the shares I spoke about last weekend at the top of the results table. These are KAZ.L and RIO.L. These shares are fully discussed in the last blog entry and are performing strongly on the back of the Copper price which itself is dependent on growing Chinese GDP. A good report from China on the 17th July helped Dr Copper and my spread bets are on their way. Glencore was also mentioned last weekend and this share also broke to a new 13 week high yesterday.
In another sector, Taptica also broke upwards to a new 13 week high yesterday. The share was positively reviewed in this blog twice during 2017. The first entry was in March 2017 and the share has appreciated by around 30% since that time.
MJ Gleeson has been discussed in this blog several times over the past few years.
MJ Gleeson plc, formerly MJ Gleeson Group plc, is a United Kingdom-based company, which is engaged in providing two businesses: house building on brownfield land in the North of England and strategic land trading, primarily in the South of England. The Company operates in two segments, which include Gleeson Homes and Gleeson Strategic Land. The Gleeson Homes segment is engaged in house generation and provides homes for sale to low income people in the areas of industrial decline, and social and economic deprivation in the North of England. The Company’s Gleeson Strategic Land segment is engaged in land promotion business by securing residential planning consents for lands and focuses on helping landowners to pay for in the South of England. The Company has operations in various regions, such as Cleveland; County Durham; Derbyshire; Greater Manchester; Lancashire; Merseyside; North Yorkshire; Northumberland; Nottinghamshire; South Yorkshire; Tyne & Wear, and West Yorkshire.
The chart of GLE.L is shown below in weekly format using my normal notation. The green line study above the price is the VectorVest Valuation while the blue line study in the window below the price is earnings per share (EPS). The chart is a weekly price view over the past three years. I have added two moving averages (20 week and 40 week). They are the basis of my weekly zone trade (WZT) technique.
The fundamentals of the GLE.L are excellent on VectorVest. It’s undervalued with a RV of 1.45 and a RS of 1.4. On a scale between 0 and 2 these are excellent metrics. The share is on a Buy recommendation.
From January 2016 to March 2017 the share consolidated and traded sideways apart from a few days around the Brexit vote. Since March 2017 GLE.L has moved upwards and subsequently tested and kissed the old resistance level. This is very positive and with a break of the last high the share looks poised for further advances.
Those eagle eyed technical analysts reading should also observe that the test back to former resistance stopped at a 62% retracement of the last daily range after completing an AB=CD pullback. FIB based technical analysts regard this as a very positive sign.
On the chart above, the moving averages form the basis of the Weekly Zone Technique (WZT), which I have used for the better part of 30 years. I name the area between the 20 week average and the 40 week average the “ZONE”. In an uptrend, a pullback into the zone represents an excellent place to look for an entry prior to the breakout. This entry needs to be confirmed by a candle pattern on the weekly chart. VectorVest has recently run an excellent course on candlestick charting and the reversal pattern on GLE.L is a text book example of a “hammer” pattern. On a weekly chart this is a very strong signal, especially in an undervalued share that’s growing EPS strongly. An early entry above the high of the hammer, well in advance of the present breakout could have been taken by those who have faith in this technique.
I can easily spend a day discussing the nuances of the WZT technique.
The greatest risk to the success of the present trend lies in the position of the overall market. At present the Primary Wave is up but the DEW and the underlying trend are down. The market printed a Confirmed Down on the 4th July. There is a green light on the Color Guard on the front page of VectorVest and that’s a signal known as a Green Light Buy. This signal should only be considered by aggressive traders who understand position sizing and risk management. Other more conservative traders should wait at least for the DEW to turn positive.
Although GLE.L is suitable for my speculative trading it may not be suitable for you.
July 18th 2017