Autonomy Corp - the pain of trading

aarrgghhhh....b*ll#x

Autonomy Corp, rose 7.1% today to close at 1376. I blogged on 15th April (after my 1300 stop had been hit), that I was going to monitor this stock and 'see what happens'.

Well now it's bloody clear what's happened! The pro's forced the stock down, taking out the weak hands, before piling back into it on expectation that it was going to beat Q1 forecasts. Today, it duly beat Q1 expectations and rocketed upwards.

What is even more galling, is that last night I analysed the stock (as well as Centamin and Wellstream) , but decided to place orders for Centamin and Wellstream only!!

I'll say it one more time - b*ll#x

That's better, I've moved on now....(& for the record, its now too far from value to consider partaking!!)

Below - My analysis from 22nd April, looking at 68% Fib retracement

And the chart today, after its mammoth 7.14% gain!

Anyone got a story like this that the want to share???

Trading Update - Autonomy continues to tank

Today saw my 1300 stop on Autonomy hit. It wasn't a great surprise, but left me feeling a little disappointed given it was up at 1400 a couple of days ago. 

Autonomy Corp Plc

Entry: 1237 (17th March 2009)

Exit: 1300 (15th April 2009)

Attic Fund profit: 1.9% 

I will continue to look for buying opportunities on this stock as the fundamentals have not changed, in fact I would expect a continuation North over the next couple of weeks, but I'm going to sit on the sidelines for at least a couple of days before considering my next move.

Trading Update - Hurry up and wait...

AtticFund Update;

Centamin Egypt +12.9%

Autonomy Corp +6.7%

AtticFund +3.8%

Centamin Egypt

After Mondays rise in Gold ($884 to $894), I felt that Centamin Egypt (CEY.L) could well benefit from this rise and from the open things looked good, with Centamin rising from 57.3 on open to a high of 60.8p in only 2 hrs.

As I'm using a leveraged product this 6.1% rise equated to a nice 1% increase in the AtticFund. However by the close Centamin had given back all of these early gains to close at 57.2p leaving me staring at a very bearish candlestick pattern (below).

Further investigation revealed that this candle has been formed on average volume which suggests that this is not a reversal and so I remain invested with my stop at 50p.

Autonomy Corp PLC (AUTN.L) was also down today.

This stock is now trading 7.6% off its recent highs, and the Attic Funds profit from this stock has eroded from a high of 5.2% to 2.3%. Taken in isolation, that is not a bad return from a single position, but it is hard to accept as this is starting to feel like a loss. On the plus side, the chart still looks incredibly bullish, with the current dip in the share price looking like a pullback (as opposed to a reversal). On further inspection, Autonomy looks to be creating a Bull Flag on the daily charts (below).

So I remain invested in Autonomy, with a stop at 1300, guaranteeing a 1.9% return. If I was to get stopped out (which is a real possibility over the next couple of days), then I will continue to search for buying opportunities on this stock as I am still generally very bullish about this company.

Trading Update - Rough ride for the AtticMan

It's been a rough couple of days for the fledgling AtticFund. With both stocks falling dramatically in the last couple of days.

Centamin is down 14.7% from a high of 62.2 on 1st April to 54.2 today and Autonomy is down7.3% from a high of 1421 yesterday to 1324 today.

It's never nice when the portfolio takes a battering but all you can do is re-assess the current situation and trade on.

Autonomy is still in an uptrend and todays sharp decline was on low volume, indicating no real conviction in the move. I have moved my stop up to 1,300, meaning whatever happens I will collect a small profit.

Centamin is also still in an uptrend and fell aggressively yesterday in-line with the decrease in the gold price. I've moved my stop to 50, which represents a small loss.

I am learning all the time about how to trade over a long time frame and certainly with Centamin, booking a profit when the trade was 18% up, now seems like a missed opportunity. But I need to keep reminding myself that this is a risky play and that the market opinion of this stock is still postitive. 

Lets see what tomorrow brings.

Trading Update - The AtticFund (5.5% for month)

Centamin Egypt CEY.L (+19.8%)

Daily candles show indecision. There is potential for a pullback/correction.

Keep an eye on the weekly candles, potential bearish formation.

Potential Resistance @ 65

Potential Support @ 60

Stop @ 51.58 (Trade is now risk free)

Target @ 70

Autonomy Corp AUTN.L (+9.11%)

Daily and weekly candles are bullish

Potential Resistance @ 1360

Potential Support @ 1250

Stop @ 1250  (Trade is now risk free)

Target - Currently Open

Trading Update - The AtticFund

The AtticFund currently has 2 long and 0 short positions:

Centamin Egypt (CEY.L)

Bought@50.57. Current Price 54.75 (up 8.3%)

Autonomy Corp (AUTN.L)

Bought@1237.78 Current Price 1312 (up 5.9%)

The Fund is up 2.9% since 24th February 2009

Both stocks now look extended from value and with a pretty decent return it's tempting to take something from the table. I'd like to be able to close out a portion of these positions and book a profit, but I'm unable to do this because of the platform I've used to trade.

I have to keep reminding myself that I'm in these positions for the long term, but what I do need to do is consider exactly HOW long I intend to stay in these positions and exactly WHAT is my profit target.

Revised strategy for Centamin Egypt

68p is a 'pre gold production' price target. With some analysts estimating 120p post production. As long as Centamin are not actually mining gold, this is still a risky play and I need to exercise caution.

A price of 68p would yield The AtticFund 4.4%.

120p would yield 17.4%. 

There is resistance between 56-58 and support between 47-50. I will keep my stop at 44.6 and place a profit target at 65p (potential AtticFund return 3.6%)

Revised strategy for Autonomy Corp

Currently trading at or near 41/2 yr highs, I would expect a further period of consolidation at the current levels. Weekly candles show real indifference over the last couple of weeks. My reasons for buying this stock remain the same, and so I remain committed to holding my position. I've tightened the stop to 1209 (1% risk) and will hold on until I see some real upside resistance

Autonomy Corp PLC - In long

My Buy Limit on Autonomy Corp was filled today. So the AtticFund is slowly (veeerryy slowly) taking shape. I don't think it was the best entry I've ever made as I think there may be a further drop in the price (assuming the current dip is a pullback), but my stop gives this trade a fair bit of breathing space.

The company announced today it had completed the acquisition of Interwoven Inc - a global leader in content management. This is good news, but may result in a drop in Autonomy share price depending on the complexities of integration.

Check here for the Reuters report on the purchase.

Happy trading dudes

Autonomy Corp - Trading Update

My focus over the next couple of weeks is in building the AtticFund (ok that's been the stated intention for sometime now, but things have been getting in the way....). I think I may also be suffering from 'Traders Block' or put another way failing to pull the trigger. This is something I'm aware I've had 'issues' with in the past, but given the current state of the markets, I'm not going to beat myself up over being cautious!

So, tonight I've placed a Buy Limit for Autonomy Corp (something I should have done a while back - see previous post!). The stock still looks good and is in a steady upturn.

My order details;

Buy limit @ 1234p (Pullback to 8EMA)

Stop - 1171p (21EMA)

Target - I'll give some thought to this later (I'm becoming aware I need to have some targets!!!)

Max risk - £189 (<2%)

Position size - £3/point. (£3 * 63pts)

The AtticFund - Trading Update

Getting fully invested is taking longer than expected - not least because I've been somewhat sidetracked by twitter! - I've posted a couple of blogs about this crazy little tool - It really is pretty cool. I'm up to 169 followers - mostly trading dudes and the odd celeb! Follow me if you want to keep up to date with my micro thoughts!

I got filled on Centamin Egypt on 24th Feb at 50.57 - I revised my entry down, as the pullback was definitely more aggressive than I expected. So far it looks like a fairly safe entry point. Stop was also revised down to 42.57 - So Funds at Risk remain at 2%. The reason for the pullback was the half yearly report - Centamin got pretty nailed with FX stuff, but fundamentals haven't changed and they are still on course to open the first modern day Gold mine in Egypt in Q2 2009. Currently I'm up 0.2% on this stock (Oh yeh! The AtticMan is a trading genius!!:))

I'm getting ready to get involved with Autonomy Corp. Since I first started following them, they've been a little crazy - A massive gap up of 12% on 9th Feb, was closed the same day. Since then, they've been chopping between 1268 and 1151 (10%). I'll either place a buy limit at the low of the range (1151) or a buy stop at the high of the range (1268).  Either way, I'm going to wait a while until it's clear which way this stock is trending in the short-term. 

Micro Focus International has also been bloody volatile! Soon after I started following them their share price shot up 5.4% before dropping 17.7%!! The 50EMA seems to have halted the slide and they have since recovered 11.2%. This sort of volatility can play havoc with the nerves, but as a leveraged trader, I'll simply widen my stops and reduce my position size. The stock is currently trading between 8 and 21EMA and to be honest it looks like I missed the best entry point for this stock, (the consolidatiion around 270) so I'll wait for another period of consolidation before getting involved.

I'm off to do some more research before my little boy finishes his afternoon nap and insists on playing 'Mary has a Baby' on an untuned guitar! (to compound how bad that sounds, he plays a right-handed guitar left-handedly....) Later

Analysis of the Software Sector

As I posted a couple of days ago, I've now got details of the companies that comprise the Software Sector (as per IG Index). These companies are;

• Autonomy Corp
  
• Aveva Group
  
• Dimension Data
  
• Fidessa Group
  
• Invensys
  
• Logica
  
• Micro Focus Inte
  
• Misys
  
• Sage Group
  
• TeleCity
  

I was pleasantly surprised that there are that many to deal with. It'll make the analysis a lot easier!

I'm going to start the analysis by simply looking at the technicals of each of the companies. A small scan will reveal whether the company is a leader or a laggard - by that I mean is the companies performance in line with the index or is the company performing badly compared to the index. I'm only interested in leaders

Autonomy Corp - LEADER
Aveva Group - LAGGARD
Dimension Data - LAGGARD
Fidessa Group - LAGGARD
Invensys - LAGGARD
Logica - LAGGARD
Micro Focus Int - LEADER
Misys - LAGGARD
Sage Group - LAGGARD
TeleCity - LEADER

Now, lets delve a little deeper into these companies.

Autonomy Software - Key points

• "A leader in intelligent search" (sounds interesting, this is a company that are working in just the right sort of area to benefit from Web 2.0)
  
• They are trading at or near 2 year highs. (Perfect, although there may be resistance as they try to break through these highs)
  
• Grown from T/O of $65m in 2004 to $503m in 2008. (Very impressive growth)
• Recently introduced a new search product (innovation and R&D spend is the sign of a good company)
• They have cash on the Balance Sheet (can finance 'stuff' without need to borrow)
• Debt/Equity Ratio is comparatively low at 2.37 (less exposure to credit crunch)

I like what I read about Autonomy. Definitely on the watch list.

Micro Focus Int - Key points

• "Provider of enterprise application management solutions" (mmm, not actually sure I know what that means!)
• Look to have expanded through acquisition (can be a risky strategy due to integration challenges)
• Purchased a company on 4th Jan 2009. (In the current market condition, this is an impressive bit of business - I wonder how they funded it?)
• They are trading at or near 2 year highs (Shows they are performing irrespective of the current crisis.
• They have grown steadily since 2004 (Solid growth as opposed to explosive)
• NO DEBT! (this makes them bloody attractive!)

I also like this company. It's on the watch list

TeleCity - Key points

• Pan European provider of independent data centers (yawn - this is not exciting!!)
• Recently announced an Amsterdam data centre (oookay, my tits are now really sagging. Not an interesting business, but, yawn, I'll keep looking)
• Doubled in size since 2006 (ok, thats quite cool)
• They are recovering from hitting a low in Nov 2008.
• Debt/Equity a massive 47.88 (This is a worry)

Telecity have been relegated to TheAtticMans sub bench. I'll keep an eye out, but they are certainly less investable than Autonomy and Micro Focus

I'll take a real quick look at the LAGGARDS to make sure I've not missed anything.....I've had a look and nothing jumps out as exciting.

Next steps. Some more detailed research into the companies and some consideration on logical entry points.

Autonomy - daily chart

Micro Focus - daily chart