This is just some thoughts, it isn't investment advice or incitement to buy in any way, just my views - please do your own thorough research. I’m not an analyst, I’m just a private investor looking after my own money. Nothing I do or say is meant as advice or should be taken as such. Here I publish my ideas and research that I have done and discuss the way I invest. Anything written here needs to be verified for its accuracy. Assume any stock I write about I likely own, so my views are biased. Inevitably I will get things wrong, everyone is responsible for their own decision making and what they buy and sell. Subscribing and reading this article means you accept the above and you take full responsibility for your own actions and decisions. Small Cap stocks can be illiquid and very hard to sell at times when demand is weak so caution is required.
Last week was the biggest number of reads after the record 11k reads on Dec 6th so it is great that so many find this popular, the last 3 substacks have averaged nearly 10k reads each. With little news of note over the past week, this weekend has been devoted to charts as promised, and more specifically, bowls.
Charts are a very important feature of my investing. They offer a visual representation of what is going on in the markets and with share prices. Many investors dismiss charts, calling it voodoo stuff or mumbo jumbo but in life and science, maths and many other walks of life, charts tell a visual story, so ignore them at your peril in my opinion.
I don’t have much time for Fibonacci retraces or Elliott Wave theory and most scientific users of charts likely wouldn’t use such guides either, in my opinion. What is important to me are trends. Most charts have two major trends which I look at closely, down-trends and up-trends. The old mantra: “let the trend be your friend” is a wise mantra to follow. As an investor, why would you want to bet against a trend unless you had an extremely good reason to think a trend was about to or had changed ? It’s like catching a train going in the wrong direction and hoping the train stops and goes the other way. It might happen but it’s unlikely. Trends tend to carry on until something changes, like news or an event. Investing is about maximising your gains, timing buys and sells can have huge effects on results and returns.
I watch charts to time buys and sells. There are two clear action points which I pay big attention to and that’s bowl-shape bottoms and rolling tops. Here’s the chart of Rolls Royce. At what point would you have comfortably have bought?
On this chart many may have liked to have bought around 40p, the covid low, but more probably bought a bit higher with the nerves that were around, probably about 80p, probably a bit after, but far more would have been buying on the little spikes up and down after then. A lot will have been holding that big fall down through 2019 or averaging in perhaps. A lot will have been throwing in the towel and selling towards the lows. Unless you really had the pebbles of steel then you likely never bought the Covid low in a hugely meaningful way as fear was so high. From the beginning of 2020 right through to mid 2022, the chart was all over the place, directionless. While I will buy up-trends, I like to buy on bowls when I see them as they frequently alert to a sustainable bottom in a chart. Not many charts make a bowl shape bottom but when they do, I pay attention.
Here’s RR. again but this time the chart fully concludes to today rather than ending in June 2022.
The chart here has made a clear bowl (one I missed at the bottom). This is a far better bottom to buy on, imo. These are far more reliable and have far more rapid upside after the bottom, imo.
There is good reason for why this might be. The big jagged spikes on the way down are traders driving it in my opinion. Traders are buying the lows, selling the highs on the way down. When a bowl appears, something often has changed. Buyers in the know, or who have picked up on loose talk on unreleased positive news, start to buy which makes the spikes smaller. There may be new or board changes driving the bowl as investors take a longer term buy and hold approach. With less volatility there’s less in it for traders. The spikes usually become smaller, though don’t go away. But more buyers in the market start to outweigh sellers and the chart starts to curve up as the balance of power changes. This trend will usually only hold if there are good things happening. The chart curves back up, often rapidly. Often, these bowls will get a news release which tells you just why the chart has made this bottom but by then you have likely missed a lot of the party. These bows are not 100% right, but I’d say at least 70% of them are. Bowls have given me the timing marker to some of my best ever buys. I might even buy bowls knowing that I know nothing about the fundamentals these days, because I don’t feel I need to, the bowl in itself may be that round and obvious that it tells me a huge amount of background sentiment and action. With a bowl, I believe you are witnessing traders selling but longer termed, better informed investors buying in at the same time. The net result is less selling compared to buying. As others either hear good news on the quiet, or whispers, or just glean more positivity, the trend start to change, a curve up happens, almost self-fulfilling. This is different to a spiked V bottom imo, these are likely caused by a big seller halting for a period but will possibly more likely return, it’s a less reliable bottom.
As I have said, these bottoms do not work 100% the same every time, if they did, investing would be easy, but the vast majority work out. The bowl shape bottom has an approximate 75% hit rate for a bounce in my opinion. It will never be 100%, but a 3/1 win rate on the chart, used in conjunction with other stuff like director buying or sector sentiment boosts your chances of catching genuine bottoms. Nothing will be 100%, there will be times that charts give false indicators from a bowl, this you have to accept. The one thing you never get with a bowl is a sell signal when the bowl is over. There may not be a reason to sell after a bowl, The trend may continue up still, and often does, but at a more modest rate.
Personally I prefer for the chart to start curving upwards to prevent pre-empting a bowl that isn’t one and that is going to take a further leg down. It’s worth missing 10% at the lows to avoid making a mistake for me.
Obviously some really good bounces happen without a bowl happening so I don’t buy exclusively into bowls only. I do find them a very positive indicator in conjunction with other events like board changes or up and coming trading updates. Bowls are not exclusive to winners but they are exclusively the best positive chart signal I see. They often create a flag to make me look closer at a stock too.
Lastly I’d say look at the timescale. Bowls can form over different timescales. Small, short term bowls tend to have sharp, short term positivity, as with CMCX at the start of the year, returning over 200% from Jan to July.
Longer term bowls tend to have bigger longer term upside recovery, as can be seen on RR.
Finding these bowls can be quite subjective but the guiding principle is to find the most prefect of curves which usually prove to be the most reliable of bowls. Not all curves are as smooth as one would like, especially where there is low liquidity in the share. This can often cause a bowl to look ‘scruffy’. Looking at charts on different timescales can help you spot the charts more easily. That’s my main guide to what I have learned from bowls on charts. Both the above returned me 200%+ and 100%+ gains this year respectively, on my earliest purchases and the bowls were both instrumental in me buying into the stocks.
One other thing. Bowls are very hard to see with hindsight in most cases, only the biggest long term bowls show. Most bowls have a lifespan of months then they turn into a continued uptrend or they give up and see some profit taking.
Here is the first bowl I ever bought for the bowl sake, 2009, as the financial crisis came to an end, Rightmove, RMV. Here’s a close up of what I saw starting at the end of 2008. I sold for a 10 bagger.
Below is how the chart looks today and that bowl circled:
Interestingly there is a big multi year bowl over the past few years again that may be worth watching. When you look back you hardly see that stark bowl that was there in 2008/9.
Below are a number of bowls I have Identified at the end of the year. They are likely worth keeping an eye on and researching a little closer to use in conjunction with other data and news.. Many I can’t even try to explain why they may be interesting, it is simply the bowl itself. They won’t all be winners remember. Lastly I’d say remember to do your research and don’t trust me – these are not tips, I’m just explaining what I find as an interesting extra positive indicator in my search for great returns.
A THANK YOU!
I have had a number of donations to my £250-£300k Village Hall fund by readers of my substack who appreciate it and realise it is all done free of charge for the love of shares and perhaps sparking a few ideas for investors and shining a light for novices.
A couple of people said they read about the fundraise a few weeks ago but only just remembered to donate will all the Christmas oo-ha and a few more missed the part about the fundraise initially.
You can read about it at the bottom of the Dec 12th Substack here:
https://cockneyrebel.substack.com/p/the-weekend-rebel-review-dec-12th
A lot of work and my free time go into this for the 3500+ readers so if you’ve made a tidy bit from some of the ideas here and want to show your appreciation to this charity raise, and give a tiny bit back then these are the BACs details:
Acc Name: Dinton Village Hall Power Fund account
Sort code: 30 98 56
Account number: 30386160
Reference: Rebel etc
Give me an email too as I want to thank donors personally.
Life moves more fluidly with a little bit of charity and goodwill here and there, in the less expected places.
Thank you.
Current Top Looking bowl for 2025
Games Workshop, GAW
The story is that Warhammers is still going from strength but in addition, after 2 years of negotiations with Amazon, they have agreed a deal on TV and Film rights. Could be huge but no numbers have been published. This bowl screams something positive happening that likely isn’t in the price yet though and is hard to ignore. Interims due around Jan 10th.
Audioboom, BOOM
A long term bowl that is also deep. Recent trading has been ahead of forecasts, with two updates increasing guidance. Potentially a lot of bouncebackability, likely a year end update in Jan.
Sabre Insurance. SBRE
I don’t normally buy insurance co’s, not my scene. However the bowl here is hard to ignore and the yield of 8.8% rising to 10% here is probably being overlooked by many as a lot of it usually comes in the form of a second half special divi, when profits have landed.
Cardfactory, CARD
Jet2, JET2
A more shorter term bowl. The last update in November said: “we are currently on track to deliver Group profit before FX revaluation and taxation for the year ending 31 March 2025 ahead of market expectations”, The next update is due mid Feb.
Mpac, MPAC
Some interesting acquisitions of late which could boost eps excitingly. The bowl here is a bit scruffy due to the illiquid nature of the shares in circulation.
Liontrust, LIO
A very short term bowl here which may get interesting after more positive trading noises from the company, big share buys by the CEO and CFO, £5m share buy backs and a 15% yield which the co reckon they can maintain for at least another 18 months.
Bloomsbury Publishing, BMY
The company has been increasing guidance regularly, has a great long term record and is forming a short term bowl since July.
BP, BP.
A bit tentative and hard to spot but looks like a bowl just in the making. Its one of the world’s biggest energy companies. I know it got tipped in the Times last weekend but that’s never enough to cause a bowl. Might be something behind it, might just be oversold.
Burberry, BRBY
I highlighted this one right near the lows in my Substack. It has come good and may have a lot more to go – the current leg up isn’t increasing in momentum though so it may be reaching a short term top. A bit too volatile for me to be comfortable at times.
Yu Group, YU.
Fab low price to free cashflow (AIM)
Victoria Plc, VCP (AIM)
I pointed this bowl out a few weeks ago at about the 52p level so it has risen nearly 60% since. I’ve nearly doubled my money on my first two buys so am ‘OBIAM’, One Bagger In A Month which is always nice but always far too rare. I pointed out also that this is very high risk with a lot of debt and not the assets to make it feel safe in any way. I’m highlighting the bowl only. Take care and do lots of research before event thinking of buying it. High Risk.
A large non-exec director buy on Thursday.
Clarkson, CKN
A longer term bowl, ideally it would be a bit more round.
Fidelity Special Value, FSV
Molten Ventures, GROW
Qinetiq. QQ.
ASOS, ASC
Could be more round so less reliable than many.
Galliford Try, GFRD
Henderson Opportunities Trust, HOT
Pensionbee, PBEE
This is as perfect a bowl as you might ever see, the gold standard. Has a really good, rounded curve.
Secure Trust Bank, STB
Smiths News, SNWS
And they are the bowls I could find that look worthy of paying attention to in the FTSE350 and Small Cap Indexes. I have not covered Aim in the main, other than YU., BOOM, VCP and MPAC that were screaming at me, as these tend to be less reliable but I’ll post any stand out Aim bowls at the weekends, when I notice them.
I obviously hold a lot of these, if I spot a good bowl and believe in the chart then why wouldn’t I ? I would say though that is might make me less than objective, perhaps biased and talking up my own shares so do your research and don’t trust your like to my chart-picking. Only you know your own risk/reward profile. Hope some of this aids you in your stock-picking and weighs you more into gains and less int losses.
Have a health and happy 2025, make lots of great memories, laugh a lot, hug a lot and avoid all the stuff that makes life tough.
I’ll be back with a more normal Rebel Weekend Review next weekend as the trading updates start to rattle in.
Rebel
rebel@cockneyrebel.uk
Twitter @rebelHQ
Carclo seems weak. I suspect a bit of profit banking with no news due for three months or so and traders chasing faster stuff with updates soon.
In fairness CAR held up quite well while lots of stuff fell so now the value elsewhere has likely caught up with CAR in many cases. I'm holding but with trading updates and likely positive surprises I may trim if I need the cash elsewhere. I don't want them to become dead money for months while lots of other bargains are showing a bit of leg and rallying sharply.
Will just play it as I see it over the next two months.
I hope that's some help.
Hi James,
Yes, do my charting on Sharepad. There isn't a screen setting though, you just have to plough through them sadly.