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The Importance of Identifying Shares Too Slow to Rise and Too Quick to Fall.

By Malcolm Stacey | Wednesday 11 March 2015

Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Hello Share Swingers. When it comes to larger companies, their share prices often seem to be on a pair of kitchen scales.

They tend to fall on some piece of vaguely bad news, when their peers in big Footsie all rise.

Just as there'll be a few improvers on the direst of days.

Then, when the risers tend to drop back a bit, as they always do when boredom sets in, those stocks were left behind in the festivities, begin to rise again.

I've noticed this trend very strongly over the last two weeks. Shares are generally on the up, but a conspicuous few won't join the party. Then they make a late appearance on the ballroom stairs and rise to equal their peers again.

Some companies keep up this little game more than others. Ashtead (AHT) the tool hiring outfit is always falling behind when everyone else is rising – and vice versa. Or so it seems to this old punter.

Another share which often bucks the trend, either up or down, is National Grid (NG.). Diageo (DGE) the drinks combo, is another culprit. You'll all have noticed some of your own shares which are like that.

I've held shares in all the aforementioned firms for many year and I'm used to these cock-eyed movements. So I just wait for the correction to come, as it nearly always does.

But I can imagine some traders getting in a bit of a lather about the whole thing. A lot of the time, they will be selling when they should be holding. Then they will be tempted to buy back in when the wayward sheep comes back to the fold. That costs money.

The only possible reason I can find why some shares are so contrary is that they do things which are not all that common. Ashtead fits that category, as does the Grid. Maybe its because Diageo is pretty impervious to recession – people drink if times are good or bad.

Any road up, it helps to identify these difficult babies, otherwise mistakes will be made. As we all know in the Punter's Return.

Malcolm Stacey has been writing about shares for more than 20 years. His first book "The Armchair Tycoon" was first published in 1998 but a revised 2014 e-version is now available. To obtain a FREE copy fill in the form HERE  

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