Observant Readers may have noticed I topped up on BAE Systems BA. via a Spreadbet at 453p earlier this morning (Thursday 1st October) to add to the other Spreadbet Position I already have and the normal Shares I have in both my Income Portfolio and in my Trading ISA (as per usual, check out my ‘Trades / Portfolios’ Page and you can see what stuff I am holding).
My Buy Case for BA. Was outlined in my earlier Blog here:
And this has not really changed much. If anything, the situation has improved because the Middle East has gone utterly nuts and BA. just signed up a big Typhoon Deal.
The Risks are as per my previous Blog but I wanted to highlight a couple of things:
- As I mentioned above, the very real risk of a General Market collapse has not been ruled out - there is stacks of Bearish Talk all around and in these thin Summer Markets it wouldn’t take a lot to spook the Donkeys and send us down below the August 24th Black China Monday Lows - personally I think that is unlikely, especially as September is now behind us, but it is a very real possibility.
- With Putin getting stuck in to bombing in Syria, it is possible that The West totally goes chicken and pulls out - this is probably unlikely but if it happens then the boost I expect to Arms Spending from the Middle East escapades may not happen.
- With Jeremy Corbyn’s so far comedic Leadership of Her Majesty’s Opposition, it is possible that his Anti-War stance could impact on Government Policy - even if the chances of him ever becoming Prime Minister are less than Zero.
Again, the Value Case has not really changed much since my earlier Blog - I enclose the ShareScope ‘Details’ screenshot below and you can work out for yourselves that it’s on a Forward P/E of 11.9 for 2016 and a Forward Divvy Yield of 5% for 2016, on my Buy Price of 453p.
All the screenshots are taken from the situation that confronted me when I decided to buy the Spreadbet last night.
I have jumped the gun on this one - but rather than just relying on the Technicals to nail my timing, I have put a lot of weight on the Fundamental Drivers mentioned above and on the Value Case here with a Dividend Yield around 5% - this should provide a lot of Support to the Share Price as Income Buyers flood in if it drops much more. In addition, some of the technicals are giving very good buy signs. Remember, I am very much a Long Term Investor and as much as I like to time the Perfect Entry and Exit, sometimes I am happy to move a little bit out of sync as Stocks held for long periods of time nearly always make me money - and of course I pick up the Divvys as well.
The Screen below shows a fairly Long Term Chart with about 4 Years in view. You should be able to see the clear Uptrend Channel marked by my 2 parallel Blue Lines and I have shoved in another Black Line which I have marked with a Black Arrow, which shows that the Price is still in a Downtrend short term.
On this basis I have bought in too early and more patient Buyers would wait for the Black Line to be broken out of.
In the Bottom Window, my Blue Arrow marks how the MACD Histograms (Moving Average Convergence Divergence) have gone Green and Positive (i.e. Bullish) and the Black Arrow shows where the MACD Signal Lines have crossed in a Bullish Way (these are just representations of the same thing).
I have shown the Black Downtrend Line here very clearly - as I said earlier, it would be best to wait for this to break perhaps. However, you cut it, there is Strong Support at 420p.
That’s it - my goodness that was unusually short for a WheelieBlog !!, see yous, WD.