Forum Archive Index - June 2001

["Peter" <pmaiden@xtra.co.nz>]

Phaedrus - great post and thanks

 

Interesting that you picked on EBO for this analysis. EBO is one of my picks in the Beat the Broker competition that is not going too well.

 

I became interested in EBO in early January (based on a whole lot of fundamentals and background) and was ready to buy then. However as you point out in your post the timing of purchases, and selling, can make a big difference to returns - even for those who tend to hold shares for a while.

 

EBO was 280 in early January but was still trending down so a purchase decision was delayed. Even the incraese to 300 in early February did not break through the trendline. Since then the EBO price has drifted down to 250 odd and in spite of some bursts of activity the price hasn't really moved from that level.

 

For long term investments I work from weekly charts and the price is still to break through the down trend line that started back in June 2000.

 

I still have not bought any EBO shares because the trend line has not been broken. Even this weeks burst to 262 (had it stayed there until Friday) would not have triggered a buy.

 

I relate this experience as support to what Phaedrus has been saying. Even for those investing longer term,  trends can signal the best times to buy and sell so maximum profits can be extracted.

 

Having second thoughts about EBO though. Still an interesting company to follow but the exposure to overseas currency on their margins and the lack of liquidity in their shares are putting me off.

 

Cheers

 

Peter