Predicting The Future
Clearly, people have wanted to predict the future since the human race began. In some cases we would prefer not to know what will happen to us, life, death, love. However, for the financial markets everyone wants a crystal ball. The normal answer is that for many investors is that “you should be in it to win it” especially for the long term as an asset class. But the fun is to anticipate price action, which is where I came into this space over 35 years ago. I thought at the time that technical analysis was an alternative answer to the rather arduous task of sifting to accounts and reports. With the benefit of hindsight and looking at the most successful investors, like Warren Buffett, it would appear that the majority would favour fundamentals.
Certainly, this is very often more straightforward than the “dark art” of charting. However, looking at the X feeds of some of the more successful investors I know, it is still the case, and is common sense that a company which is winning on fundamentals will simultaneously have a chart breakout. Indeed, many times the price moves up before the realisation of a bull situation arrives. It is also the case that even when the cashflow arrives, due to an imbalance between buyers and sellers, the stock does not go up.
Therefore, you have the option as a traditional investor of waiting until there is a move, or as a technical trader looking for leading indicators on the upside. They may be a simple trend line break, a rise in the Relative Strength Index through the neutral 50 / 100 level, a rising 50 day moving average, a bear trap rebound, or a gap off the low. All of these are unrelated indicators, and I have found over the years, especially in recent years, that two or more of these events happening can be a very powerful indication of a turnaround.
Even better, support coming in above the 50 day line – persistently, what I call a sideways shuffle, very often implies a large move to the upside is going to happen. This indication of the magnitude of a move, also something that tight Bollinger Bands can imply, is something which is rare, but by definition potentially very beneficial. In my daily Chart Rundown video I apply all these techniques in real time, looking for “the big one.” Of course, I am aware that everyone and their mother is posing as a stock market guru these days, there is no barrier to entry, or cost in setting up. But I would commend the few people out there in the X-verse and beyond, both technical and especially, fundamental ones, who do actually provide an altruistic service. They may be talking their own book, and may benefit from others following their trades, but it really does help when they talk through their thinking on stocks and markets. Even if you have been round the block, there is always more to learn.
EasyJet Bid Leak?
It was interesting that on X, before the 4.30pm close there were rumours that there could be a takeover bid for no frills (and no baggage) airline EasyJet (EZJ). This meant that those who believed the story had an opportunity to buy the shares and potentially make a decent profit. Of course, if Castlelake had not expressed interest (according to The Financial Times) these “insider traders” would have lost money and no one would know or complain. But looking at the chart it can be seen that EZJ shares gapped up on Tuesday. A gap higher, when the subsequent day’s low is higher than the previous day’s high, is a sign that there has been a market imbalance, and someone has caught the market off guard. I would suggest that the smart money went into EZJ on Tuesday, knowing that a potential bid was on the way. And it would appear that it has. If nothing else, this is a shot in the arm for the London market, something it always needs. More so when it is M&A involving a high profile FTSE 100 company.
This Week’s Stocks in Focus
Cellbxhealth (CLBX) shares were up nearly 100% this week, and quite deservedly so, given the recent newsflow. The company really is rubbing shoulders with giants, in this case a a Master Services Agreement with AstraZeneca (AZN). Indeed, whatever the agreement, the big win here is actually getting AZN to be named. Normally, international blue chip names do not reveal themselves, especially when small cap companies are involved. Echoing what I wrote above, there was a one week sideways shuffle for CLBX above a rising 50 day moving average a couple of weeks ago, indicating a major move to the upside was on its way, and CLBX was mentioned as a turnaround ahead of this. They have since doubled. Fundamental investors, unless very well informed, would have had trouble matching this.
Red Capital / Apertura Energy
Red Capital (REDC) is one of the few companies on the stock market that I has not heard of prior to the recent share price jump and news. Given that it is soon to change its name and TIDM code to Apertura Energy (VZLA) and impose a new acquisition / investment strategy. Notably, given that there has not been much chart information, it is all the more ironic how well the calls have gone here. There was an initial target of 30p, then 45p, 65p and 88p in successive days. Dark arts indeed.
GenIP
Given the area it is in, I have to say that GenIP (GNIP) is a company I have a soft spot for. That said, the market continues not to give the provider of AI-driven services to help research organisations and corporations commercialise their innovations, the credit it deserved. This is even after it announced its audited results for the year ended 31 December 2025 on Wednesday, which delivered a decent revenue jump for 2025 to over $500,000 and has positioned itself to scale going forward. While one might not except the kind of bonkers AI valuations we see for companies Stateside, the current £1.4m market cap does appear rather mean. I wonder what the fundamental investors make of this one?
MedPal
What the London needs, and needs badly, are as many new IPOs as possible. Unlike some self proclaimed fonts of knowledge on the market (sing victory when collapsing small caps / quiet when wrong) new IPOs need all the encouragment they can get. This does certainly not mean calling the glass half empty when it is half full, or even when full. In the case of MedPal (MPAL) it can be said that the company has been one of the success stories at the small end of the market, building a business at scale, in a professional manner, with excellent management. Evidence of this, over and above the way that its chosen wellness field has been ballooning, backed by the weight loss jabs. The company has unique licenses for online deliver, acquired during the pandemic, and they are not handing them out any more. This is a USP which the market has not factored into the current £15m valuation, although it has been much higher and should revisit those highs above £50m if the latest revelations in the half year report are anything to by. The key to future growth is provided by MPAL’s automated NHS dispensing hubs. Yes, that NHS which we all worship as a god. Hopefully, MPAL can help make the bloated organisation more efficient and waste less money.
