Robbie Burns
Robbie Burns's columns :
29/03/2005ISA Shares
13/03/2005Trading Patience
28/02/2005The Bear Necessities
16/02/2005Stock Market Psychology Seminars
01/02/2005Share Imagination
19/01/20057 Deadly Stock Sins
10/01/2005Happy New Year
21/12/2004Stock Picks 2005
13/12/2004Suspended Shares
29/11/2004Share Teasers
12/11/2004spread-betting-secrets
03/11/2004Nervous Nineties Stocks >>
28/10/2004The Naked Trader Thread
25/10/2004UK Retail Stocks
15/10/2004New Stock Research Tools
08/10/2004Look at the Whole Picture
29/09/2004Vanco and Bullen Energy
13/09/2004Market Psychology
31/08/2004New Stock Issues
20/08/2004Trading Volume Codes
12/08/2004Dire Markets
04/08/2004Company Research Tools
27/07/2004House Prices and Covered Warrants
20/07/2004Rocky Stock Markets
13/07/2004Company Research
05/07/2004Recovery Plays

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Robbie Burns – The Naked Trader

Robbie has been trading full-time since 2001. His book "The Naked Trader" (which also has useful information on how to use advfn) has become one of the biggest-selling finance books, reaching the top 150 books on Amazon - order it here. Trades made for Robbie's website have amassed profits of more than £300,000. You can read about his buys and sells daily at www.nakedtrader.co.uk.


Nervous Nineties Stocks

03/11/2004

I've found over the years that it's worth looking at shares that are about to hit, or are in "the nervous nineties".

By that I mean a stock that's somewhere around 87-96p or 187-196p etc.

That's because a round number like 100 or 200 seems to create a big barrier for investors.

Shares that are climbing often reach close to the barrier but can't get through it.

But the reason for looking at buying shares in the nervous nineties is that if the barrier is breached - and the share goes through the 100 or 200, etc- they often climb fast because the barrier has been removed.

And it's often worth topping up after the barrier has been breached to catch the next wave up.

Of course, I'm not saying buy every share before and after a whole number barrier!

The right fundamentals and rising chart pattern should be in place. It should be a share you want to buy.

And if you're sure about it, it's worth being patient as shares often get close to the whole number, then come back, try again then come back a few times.

For example I bought a company called Fenner around a year ago at 87p or so as it was breaking out of a previous range. It went up to 97p, and then dipped back below 90. Then it had another go and failed. But on the next go it pushed up above 100.

It stayed there for a while and then headed up to 107 at which point I bought some more shares. It then tested 100 again but I held on, as 100 had become a major support level. This proved the case and ever since then it's been up, up and away with the price up to 127p as I write.

A recent example is Hunting which I bought at 185p. It has behaved in a similar way - it went up to 195, looked like it was going to break through the 200p barrier only to drop off back to 185. I suspect another attempt will be made which could be unsuccessful but a third attempt could bring it over 200p. If that happens, then it's likely to whiz up to 220p.

UCM, another hold, is toying with the 100p level.

Of course it can be risky playing the nervous nineties - the share could have broken out prematurely and could retreat.

So sometimes if I'm not sure I wait for the round number barrier to be broken. This happened with White Young Green.

I bought at 205p, after the nervous nineties barrier had been broken. The share went to 220p then retested 200p again. After that there was no stopping the party and the shares have whizzed up to 270p. At this rate it'll be in the nervous nineties £1 higher!

It's all (fairly obviously) to do with human psychology. These round numbers nearly always stop shares in their tracks. But once that round number is broken optimism abounds.

The same I think is true of shares in a downtrend. A break below the round number can see quick further falls as it erodes confidence further.

So I'm always aware of the round number area. It pays to watch shares closely that are around this level and if you get it right there can be big rewards.

Talking of big rewards, there seem plenty of opportunities for making money in the markets right now - I'm bearish for next year but I want to make hay while the sun shines!

Shares going very well for me right now are Fenner, Get, Ted Baker, Roxboro Grp and UCM.


You can read Robbie’s daily market comments together with his latest buys and sells at his website www.nakedtrader.co.uk

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