What’s Happening to the Share Price of Surf Stitch Ltd?

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What does Surf Stitch Ltd do?

This is a follow up to a posting I made on 07 August 2015, which you can see here.

Surf Stitch Ltd [ASX:SRF] is an online surf and fashion retailer. They supply fashion and accessories that appeal to their core consumers of 15–30 year olds.

The company has recently gone on a soft sell, content strategy, acquiring online surf magazines to sell their fashion products.

Anyway, what is the chart telling us now?

What does the chart look like now?

I always find it helpful to bring up a chart. Here’s the updated daily chart of SRF.

Surf Stitch revisit

Source: STEX

SRF is slightly up in today’s trading. However, since my last update, the company has clearly broken the lows of the previous month. You have to at least be aware of that.

What now for SRF shares?

Well the uptrend is uncertain for now. If you are trading the daily chart, it’s clear where you could apply some risk management, if you chose to do so.

Perhaps the new soft sell, content strategy, is slow to build the expected sales. Whatever the case, you have to listen to the market.

The most important thing in investing is risk management; it is one of those things which isn’t written about enough in market commentary.

It just seems the lower a stock goes the tighter you hold it. That’s a place you don’t want to be. If you are uncertain about a stock, you could — if you chose — apply your risk management quickly and early. You’ll find you’ll sleep easier at night.

The other point is this: there is always another plane leaving the airport. Life is short, don’t tie up your capital for long periods hoping and waiting for things to turn around. There are better uses for your capital.

If you bought that last break and chose to apply your risk management, you have come out almost even, broking loss aside. Move on, and look for more certainty. They don’t all run.

You can get some useful ideas on risk management here. It really is the difference between failure and success.
Cheers,
Terence Duffy,
Research Analyst, Cycles, Trends and Forecasts

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