On Friday, the Dow Jones Industrial Average gained 38 points, or 0.4%, to end the week at 10,211 (up 2.8% for the week). The S&P 500 Index gained 5 points, or 0.4%, to 1,091 (a gain of 2.5% for the week) and the Nasdaq Composite Index gained 25 points, or 1.1%, to finish at 2,243 (a gain of 1.1% for the week). The FTSE 100 rose 31 points to 5,164, a rise of 0.7% on the week.
Markets were driven upwards by some encouraging consumer sentiment data in the U.S. and receding fears about the European debt situation. Overall the week proved highly volatile as traders worried about the potential impact of further sovereign debt crises such as Hungary. However, such volatility sometimes offers up some excellent trading opportunities. For example, for those investors with the nerve for it, BP offered some good "bottom fishing" trades and economically sensitive stocks like U.S. industrial company Caterpillar (CAT) showed sufficient moves over one or two day period to enable day trading profits. It seems clear that the battle between the bulls and bears will continue for the foreseeable future. Hopes of strong results from the quarter two earnings season starting July and positive consumer related data will be looked upon with interest by market optimists, whilst continued fears of euro zone defaults and a slow down in China will fuel the bears.
Contrarian Investor UK believes that any moves below 10,000 on the DOW and to the 5,000 mark on the FTSE are good buying opportunities as despite the threats to recovery, the global economy seems to have left recessionary pressures behind it, albeit with the help of massive government stimulus packages (notably the U.S. government's). The down side of all this stimulus and previous periods of high spending is that many countries including the UK are now being force to pay down the huge debt burdens with severe austerity packages which may crimp the bounce back to economic health. So this remains a trading environment, buying on the peaks and selling on the dips. I for one would not be an advocate of buy and hold and I am continuing to trade in and out of favoured stocks where I know the trading pattern and can take advantage of weakness.
BP (BP).) - A few trades were made in BP this week. Some failed, triggering 5% guaranteed stops but others succeeded, notably one initiated at £3.40 when sentiment hit rock bottom on Thursday morning after a 15% fall in the U.S. market the night before. Overall profitable but I was wishing that I had more conviction when the company moved so low. But the move down from £4 + was so rapid, I felt that caution was prudent especially with the bashing coming from across the Atlantic and the likelihood of dividend suspensions driving out income investors. It now seems that value investors looking for stocks with low future price/earnings multiples have begun to buy in.
GW Pharma (GWP) - A volatile week for GW pharma, with news of Sativex UK approval anticipated by the end of the month. It finished at 122p, up 5% for the week after moves to the 113p level earlier. Continuing to hold a reduced position after the interim results on anticipation of positive news.
Coal of Africa (CZA) - Coal of Africa fell back to my purchase level after pressure on commodity stocks this week. I have topped up at 105p given my conviction in this company and the share price levels currently are below those seen when Vele mine approval was still to be received. Upside of the remainder of the year seems likely with increasing production from its key coal mines in South Africa.
ITV (ITV) - With the TV company's shares dropping to 51p on Wednesday, I took the opportunity to buy in and then sold most of my position at a 10% gain on Friday after a move above 56p. Given the trading range of this share, moves down towards 50p seem to be invariably profitable and with earnings likely to be strong in Q2 due to the World cup it is a good company to hold.
Ithaca Energy (IAE) - Despite a 30% increase in proven reserves in the North Sea, Ithaca had a disappointing week finishing down 8% on the week at 146p. I continue to hold as fundamentals seem strong with top notch management.
Barclays (BARC) - A fall at around the £2.76 mark on European debt worries was an opportunity to buy in and sell out on a rise back to £2.90.
Falkland Oil and gas (FOGL) and Rockhopper (RKH) - Positions in these Falkland Island stocks restarted with news from the FOGL Toroa drill prospect due to early July and with Rockhopper completing a heavily oversubscribed funding raising at £2.80 seemingly giving a floor to the price and with plenty of news to come. After a fall to £2.70 on Friday morning, RKH bounced back to £2.90 presumably facilitated by market makers trying to fill orders for instituions who wanted more stock than was on offer in the placing.
Markets were driven upwards by some encouraging consumer sentiment data in the U.S. and receding fears about the European debt situation. Overall the week proved highly volatile as traders worried about the potential impact of further sovereign debt crises such as Hungary. However, such volatility sometimes offers up some excellent trading opportunities. For example, for those investors with the nerve for it, BP offered some good "bottom fishing" trades and economically sensitive stocks like U.S. industrial company Caterpillar (CAT) showed sufficient moves over one or two day period to enable day trading profits. It seems clear that the battle between the bulls and bears will continue for the foreseeable future. Hopes of strong results from the quarter two earnings season starting July and positive consumer related data will be looked upon with interest by market optimists, whilst continued fears of euro zone defaults and a slow down in China will fuel the bears.
Contrarian Investor UK believes that any moves below 10,000 on the DOW and to the 5,000 mark on the FTSE are good buying opportunities as despite the threats to recovery, the global economy seems to have left recessionary pressures behind it, albeit with the help of massive government stimulus packages (notably the U.S. government's). The down side of all this stimulus and previous periods of high spending is that many countries including the UK are now being force to pay down the huge debt burdens with severe austerity packages which may crimp the bounce back to economic health. So this remains a trading environment, buying on the peaks and selling on the dips. I for one would not be an advocate of buy and hold and I am continuing to trade in and out of favoured stocks where I know the trading pattern and can take advantage of weakness.
BP (BP).) - A few trades were made in BP this week. Some failed, triggering 5% guaranteed stops but others succeeded, notably one initiated at £3.40 when sentiment hit rock bottom on Thursday morning after a 15% fall in the U.S. market the night before. Overall profitable but I was wishing that I had more conviction when the company moved so low. But the move down from £4 + was so rapid, I felt that caution was prudent especially with the bashing coming from across the Atlantic and the likelihood of dividend suspensions driving out income investors. It now seems that value investors looking for stocks with low future price/earnings multiples have begun to buy in.
GW Pharma (GWP) - A volatile week for GW pharma, with news of Sativex UK approval anticipated by the end of the month. It finished at 122p, up 5% for the week after moves to the 113p level earlier. Continuing to hold a reduced position after the interim results on anticipation of positive news.
Coal of Africa (CZA) - Coal of Africa fell back to my purchase level after pressure on commodity stocks this week. I have topped up at 105p given my conviction in this company and the share price levels currently are below those seen when Vele mine approval was still to be received. Upside of the remainder of the year seems likely with increasing production from its key coal mines in South Africa.
ITV (ITV) - With the TV company's shares dropping to 51p on Wednesday, I took the opportunity to buy in and then sold most of my position at a 10% gain on Friday after a move above 56p. Given the trading range of this share, moves down towards 50p seem to be invariably profitable and with earnings likely to be strong in Q2 due to the World cup it is a good company to hold.
Ithaca Energy (IAE) - Despite a 30% increase in proven reserves in the North Sea, Ithaca had a disappointing week finishing down 8% on the week at 146p. I continue to hold as fundamentals seem strong with top notch management.
Barclays (BARC) - A fall at around the £2.76 mark on European debt worries was an opportunity to buy in and sell out on a rise back to £2.90.
Falkland Oil and gas (FOGL) and Rockhopper (RKH) - Positions in these Falkland Island stocks restarted with news from the FOGL Toroa drill prospect due to early July and with Rockhopper completing a heavily oversubscribed funding raising at £2.80 seemingly giving a floor to the price and with plenty of news to come. After a fall to £2.70 on Friday morning, RKH bounced back to £2.90 presumably facilitated by market makers trying to fill orders for instituions who wanted more stock than was on offer in the placing.
