Generating big moves

Many different factors can move a share price up or down a little, but only something significant can produce a large move in a share price.

Some companies’ share price can be naturally volatile if their business model is tied to a volatile commodity (e.g. Energy, Metals) or to an evolving competitive environment (e.g. Pharma, Tech). But you don’t have to rely on just these specific sectors to find tradable opportunities. Almost all UK 100 companies can be affected by one of these common factors.

When investors are exploring the markets, looking for potential next big market moves, the following drivers can help spot a tradable opportunity.

• It is important to be aware when companies are reporting quarterly and annual results or when significant trading statements are scheduled for release. Major UK Banks are reporting Q2 results in early August and such reports could generate big market moves.
• The key to understanding earnings announcements is to compare actual results to consensus expectations. If a company is doing well, but analysts expected it to do even better, share price may react negatively due to perceived underachievement. Accendo Markets can provide you with broker previews when they are issued.
• Guidance is key. Companies usually issue expectations for sales and profits for the full year. Interim results that reiterate/upgrade this outlook tend to be viewed positively by the market. Those that downgrade the outlook (profits warning) tend to be taken negatively, the bigger the change in outlook, the bigger the reaction. For example, brickmaker Ibstock’s FY profits warning on 30 July led to an almost immediate 13% intraday share price fall, potentially offering bargain hunters a tradable opportunity.
• Mergers & Acquisitions (M&A) activity can produce significant share price moves, both on the day of the announcement of the takeover offer, and in the following days, as the company’s share price often moves towards the offer’s implied value. For example, shares in pharma company Shire were +10% on the day the M&A offer was announced (28 March), but have since gained another 27%, getting closer to the offer’s implied share price.
• Ex-Dividend dates often produce significant falls in share prices, as the market attempts to “match” the reduction in the company’s value from dividend that is set to be paid out (as shares no longer trade with a right to receive the dividend). However, shares tend to recover after the ex-dividend date, presenting a tradable opportunity to buy CFDs when shares fall and then benefit from the recovery. For more information on these kinds of Dividend Plays, you can consult our in-depth report by (clicking here).
• Changes in the macroeconomic and geopolitical environment can have an outsized effect on the movement of a company’s share price. Most international businesses are exposed to the ongoing global trade confrontation between the US, China and the EU. Many UK companies are similarly affected by Brexit and the 2018 UK economic slow-down. Specific sectors like Banks and Housebuilders are sensitive to changes in key interest rates set by the Bank of England.

Tradable opportunities

A valuable part of our service here at Accendo Markets includes highlighting trade opportunities such as momentum (positive or negative), breakouts and breakdowns, trading ranges and results/dividend plays in case you need a hand. We will help you identify which shares have risen or fallen sharply, may be near a top or bottom or could offer another specific tradable opportunity allowing you to maximise your profit potential.

Monday through Friday we scour the charts of the biggest and most popular shares for qualitative signs. We also filter huge amounts of data for quantitative signals, we analyse corporate news for both the positive and the negative, we look for read-across from other companies and monitor live share price reactions. In short, we do the heavy lifting for you, so you can decide which ideas are best for you, and which opportunities you want to trade.

Do you want to know which shares are down 20% from this year’s high? Looking for a bargain, so need to know who’s trading fresh all-time lows? Interested in who’s fallen most over the last day/month/week? Who’s tanked after results this morning and so could rebound?

We do all the above day and in day out and can tailor it for clients with certain sectors and stocks. No advice, of course, just quality assistance from the friendliest trading floor in the City of London.

Seize the moment

Does this sound like something that could be interesting to you in your day-to-day trading?

Exciting tradable opportunities appear all the time. If you need a helping hand in navigating the market and/or executing trades on your behalf, our team of experienced brokers and research analysts can help you achieve your investment goals.

Taking advantage of Accendo Markets’ service is rewarding and simple. Just sign-up to our Research & Trade Ideas, so you can immediately start benefiting from our daily research publications. And if you need a more personalised approach that is designed for your individual needs, get in touch with one of our professional brokers who can help you manage your portfolio and find new trade ideas.

Still not convinced? Then continue to the next page of the report, where we examine several big-name UK 100 companies in more detail. All of them presented recent investment opportunities that could have been profitable even considering new deposit requirements.