A possible pick for penny share hunters

Jubilee Metals (LSE:JLP)

How we laughed, somewhat uncontrollably, seeing the Dow close the session at our target level or as near as dammit. (Out by 1.4 points) The problem was, it cheerfully ignored all other logic during the session itself, this doubtless caused by the inability of measuring timeframes.

We’re not intending to abandon our approach, however, as it did bring one thing to the fore. The bias amongst Dow components indicated an ‘up’ day was coming, and if this new methodology only gives one “safe” indicator, we’ll be happy knowing market direction a day in advance!

Jubilee Metals (JLP) are proving mildly interesting. Until September last year the share price had been wallowing in a hole, one which indicated a bottom potential at just 0.5p.

But as the chart below highlights, the share price was permitted through the downtrend since 2010 and, while incredible respect has been paid to this historical blue line, exquisite care has been taken to ensure the price never actually closed below blue in the months since.

Usually we take heed of this sort of nonsense as it generally indicates the market has an expectation, perhaps a stream of positive news is expected, perhaps “they” just do not with the price stuffed into the ground!

Regardless, the situation now looks slightly worthwhile as movement now above 4p should provoke growth to an initial 4.25p with secondary, if bettered, a very possible 5.86p.

The important thing for the longer term looks like the potentials should the share ever manage to actually close above 4.875p, the high prior to the trend break.

For a bunch of boring reasons, we’ll take a future look at this as its long term prospects become quite strong due to the top of the immediate blue downtrend hovering around the 40p mark.

This alone is liable to provide considerable strength in the event the price starts move up again.

For now, it’s not stuffed and visually just hibernating we think. But perhaps worth keeping an eye on.

Alistair Strang has led high-profile and “top secret” software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know “how it worked” with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.