Experimenting some TA

[blu3]

Hoop, I am really grateful for you taking the time to share your analysis with us! I've been trying to go through your chart and understand as much as I could but I don't think that I will be able to come up with such a detailled analysis in my upcoming picks—it seems so easy to miss things! Hopefully I will get there one day.

I do always look at the “all data” charts to get an idea of what has been happening with a stock but shamefully the cyclical type of this one didn't strike me. Thinking of it, I guess the cyclical conclusion can only be taken if backed up by the type of the industry, and indeed it makes sense when knowing that salmon can go off the menu as you say. My intent was definitely to pick a growth stock, based on the fundamentals and the catalysts that I have outlined, so hopefully it will fit in your “growth with cyclical behaviour” category

It's funny that you're pointing out a cup and handle pattern because it has been described in the book “Trade Like a Stock Market Wizard” with “obvious” illustrated examples, but even though they were clearly highlighted in the book, I still couldn't see them... and yours is no exception. Where am I supposed to see anything like a cup and a handle here?? I can't see anything having that shape in the area that you've marked?

Thanks for pointing out the gaps, I guess that's the easiest to pickup here while being apparently quite a useful indicator. From what I understand, the one in July with an extreme volume is a breakaway gap, then it's hard to tell if the 2 last ones are runaway, exhaustion, or even island gaps. The island gap can't be interpreted just now since we'd need to wait for a downward gap (need to monitor this!), as for the other ones I'd pick the runaway one since the volumes were high but not extreme neither as per the previous breakout gap. If we see these 2 latest gaps being filled, this would be worrysome and could indicate a reversal, right? That being said, can the latest gap that you've pointed out be really considered as one? It seems that the candlesticks shadows are not forming a gap?

Just to clear up things about stop losses, what is supposed to represent their price? Am I right thinking that a stop price should be placed at a level where one would expect the price to go much lower if reached? In your example, hitting $4.23 would mean that the support at $4.26 has been broken through and that you'd expect the price to freefall towards the next support level at around $4, which is a larger risk (possible loss) that you are not willing to take? Also, if the support level is at $4.26, is it really enough to place a stop only a few cents below it at $4.23? Couldn't it be triggered too promptly due to intraday noise?

In any case, your analysis being much more convincing than mine, I have updated my stop price to $4.23, which isn't increasing much my risk anyways, so thank you again!

And finally... did you guys really buy that stock? I thought that I've made the disclaimer clear in my first post! Next time, you should definitely take into account in your analysis that I've been pretty good at picking losers in the past (and most likely still am)

[ratkin]

And finally... did you guys really buy that stock? I thought that I've made the disclaimer clear in my first post! Next time, you should definitely take into account in your analysis that I've been pretty good at picking losers in the past (and most likely still am)

I havent actually bought it, as im technically still in my no buy zone, althouh admit i was going to pick up a few K worth on friday just for the heck of it, but noticed the price was down and thought i would wait and see what is does over the next few days.

That clear stop at 3.98 was partly what attracted me to it, really like to buy ones that have a very solid stop point to wprk with, makes it easier to pull the trigger if it goes wrong

I have owned Tassel before, quite a few years ago now , probably about ten. They made me money then so have a bit of a soft spot for them.

Hoop, you say Tassel is cyclical, and it may have behaved like that at times, but i think there a case for putting in the growth category, although its one of those in between types

[blu3]

Watching: TIL (NZX)

Technical Analysis




- +238% from its 52-week low
- all-time high (no overhead resistance)
- price > daily MA 50 > daily MA 150 > daily MA 200
- all MAs are pointing upwards
- higher highs and higher lows
- large volume on up weeks but some fair ones on down weeks/days too
- DMI+ > DMI- on both weekly and daily charts
- MACD-H pointing up on both weekly and daily charts
- just went through 2 upward gaps in a week


Fundamental Analysis

Disclaimer 1: I have been picking some numbers from the reports and computed some others without really knowing what I have been doing. The chances are big of having made all sort of errors. DYOC (do your own computations).
Disclaimer 2: I'm not too sure how to interpret all these numbers but I'd bet this is pointing towards the early stages of some serious growth.

	FY 2015	FY 2014	FY 2013
revenue	36.6 (+23.01%)	29.754 (+11.58%)	26.666 (+17.79%)
net income	4.523 (+322.71%)	1.07 (+3047.06%)	0.034 (+115.6%)
net profit margin	12.36% (+243.64%)	3.6% (+2720.44%)	0.13% (+113.24%)
EPS	0.07 (+250%)	0.02 (+inf)	0 (+inf)
ROE	16.61%	4.66%	0.16%
cash	2.67 (+55.43%)	1.19 (+7.2%)	1.11 (-41.7%)
debt	1.6 (-64.44%)	4.5 (-31.57%)	6.576 (-18.98%)
inventories (finished goods)	2.916 (+40.12%)	2.081 (-33.62%)	3.135 (+22.56%)

Note 1: the percentages in the table below reflect the changes from the previous half year results, not the changes with the corresponding half year from the prior year. Maybe it would have been more judicious the other way around since the sale revenues seem to be relatively cyclical?
Note 2: The numbers for the H1 2016 come from the company's guidance, with/without their recent acquisition.
Note 3: The H1 2016 guidance for the net income actually seems to point to their net profit before income tax so I subtracted 10.6% out of the numbers, which was the ratio of taxes applied during H1 2015.
Note 4: I guess the net profit margin for H1 2016 is a bit meaningless without subtracting the price of the acquisition to focus solely on the recurring sales? In fact, maybe the formula “net profit margin = net income / revenue” could potentially gain from being revised to isolate better the core activities?

	H1 2016	H2 2015	H1 2015	H2 2014
revenue	24 (+111.6%) / 75	11.342 (-25.67%)	15.258 (-5.72%)	16.183 (+19.25%)
net income	4.29 (+21.22%) / 8.94	3.539 (+259.65%)	0.984 (-26.51%)	1.339 (+597.77%)
net profit margin	17.88% (-42.69%) / 11.92%	31.2% (+383.72%)	6.45% (-22%)	8.27% (+517.68%)
EPS	0.07 (+40%) / ??	0.05 (+150%)	0.02 (+inf)	0

As for the P/E, it's currently at 27.17 and a first dividend has been announced!
Some new records might be on their way for H2 2016 since H1 seems to be a weaker period?


Context

For what it's worth, TIL's share price didn't seem to be much influenced during the small pullback of the S&P/NZX 50 between August and September.


Catalysts

- acquisition of cosmetics importer and distributor, CS Company. Announced on 18/08/2015(pdf).
- new products development as a factor of growth.
- new distribution channels in the US.
- institutions buying: Tea Custodians Limited doubled their stake during FY 2015, Pie Funds Management Limited recently secured the 3rd spot (I believe) in the shareholder list with a serie of buyings since September. More to come?


Worries

- to be honest I'm not sure how such products can sustain growth for an extended period of time but that's probably because I know nothing of this industry. Hopefully I'll learn soon enough.
- I don't get why the sales for the Ecoya section dropped by 91.5% in the US for FY 2015?


Conclusion

In short, I feel like a nice uptrend driven by growth is forming but it all seems a bit too risky at the moment. Especially after such a quick +22% price raise during the past 2 weeks instead of showing a nice price development, and that obvious stop loss to be put around the $2 mark, from which it would be easy to be shaken out by big investors. Instead I would like to see some consolidation and pullbacks, with possibly a Volatility Contraction Pattern (VCP ©Mark Minvervini), showing signs of institutional accumulation that could push the price much higher.

The truth is that I was about to take a small bet by getting in but I instead decided to test my discipline on this one after reading some more of “Trade Like a Stock Market Wizard”. My convictions being shaky, I might be convinced to try my luck—which I will probably do soon enough on other stocks anyways

Note that I'm not saying that the price won't go higher anytime soon (like if I could predict it anyways!), but the idea for me here is to reduce the risks by waiting for a more optimal entry point configuration instead of having my stop loss being triggered too easily. I guess many here are already happy with their current gains though, so congratulations and best luck!

[ratkin]

Happy days, for the first time since May i am permitted buying on trading system ASX Finally has CC1 20 finally above zero, as can be seen on the chart
Have taken the opprtunity to actually buy Tassel. In at 4.55 stop at 3.97

asxhappy.jpg

[blu3]

For the little story, GEM hit twice my updated stop loss price of $3.48 while I was not in front of my screen and so I couldn't trigger the sell order. Being in the middle of a move and seeing that the price was being a bit too erratic for someone not so available, I finally decided to sell yesterday at $3.48 for a meaningless profit. And of course today the price is rallying and has hit the $3.65 mark so far! I had a feeling that this could happen seeing the fairly strong support at $3.48 during the previous days... oh well

[blu3]

I ended up doing the guinea pig by transferring my ASX portfolio over to Interactive Brokers, and it all went super smoothly. I opened a margin account there, giving me access to shorting, and defined the base currency to NZD. This allowed me to transfer cash directly from my NZ bank account over to their NZ bank, to then handle all the currency conversions directly within IB. As for my ASX shares, since I didn't subscribe for CHESS I simply had to send them the SRN number for each holding, and a couple of days later they were showing up in my account. Much more straightforward than what I imagined.

One disappointment being that their market screener for the ASX requires subscribing to some extra data which is not free. So I'm still on the lookout for some free screeners for the ASX (and NZX). Apparently it's possible to open an account with CommSec for this purpose, without having to pay anything nor having the obligation to execute any trade, but I wasn't elligible as a resident from Europe.

On a side note, is there no petition to sign yet to bring back Paper Tiger and KW? Maybe are they hiding on another forum? We still have much to learn from them, we can't afford losing their tracks!

[ratkin]

Time for an update, seems i am the only one left in
Blu3 stop at 4.27
Ratkin Stop at 3.98
Hoop stop at 4.23?
Baa Baa stop at 4.50? Already out

It has been a few months now and the trade is still hanging in there, looking like it might close on an all time high today. Here is the updated chart. Have moved the stop up to 4.38, as this is a longer term trade, dont want to risk being stopped out just because the market has a panic attack
Attachment 7842

[Hoop]

Time for an update, seems i am the only one left in
Blu3 stop at 4.27
Ratkin Stop at 3.98
Hoop stop at 4.23?
Baa Baa stop at 4.50? Already out

I confused..........I'm still in......and I would assume Blu3 is too????..............the lowest it got after buying in was 4.39... my entry stop back in Nov 21st was set at 4.23...
As with you my stops rise when other supports are added to the uptrend ..so I'm the same as you, about $4.38 that's 1/2c below the second lowest support... being the 4.40 support..

[ratkin]

I confused..........I'm still in......and I would assume Blu3 is too????..............the lowest it got after buying in was 4.39... my entry stop back in Nov 21st was set at 4.23...
As with you my stops rise when other supports are added to the uptrend ..so I'm the same as you, about $$.38 that's 1/2c below the second lowest support... being the 4.40 support..

Good stuff, pleased to see you have your stop and reasoning the same as my own, gives me confidence have done it right. Think blu got out but not sure

[blu3]

Good stuff, pleased to see you have your stop and reasoning the same as my own, gives me confidence have done it right. Think blu got out but not sure

I'm not out yet, I did set my stop at $4.23 following Hoop's recommandations.

And I enjoy making a fool of myself on a daily basis regarding my previous analysis leading me to not buy TIL at $2.2.