Wednesday 5 January 2022 09:58 – by Moosh
My first volume purchase I tried was from Zenith Energy (LSE: ZEN). In early July 2021 I noticed a spike in news volume so I figured I would follow the volume. As this was the initial volume buy test, I reduced the buy and from mid-March calculated 10,527 shares which were bought on July 22, 2021 for £ 106.94 . these were sold on July 29, 2021 for a profit of 14%.
Well that seems a little too easy to me for such a small value and I was wondering if it was the beginner’s luck!
Above: ZEN three-month chart
I tested ZEN again in the next price cycle, starting the cumulative calculation of volume purchases from the July 2021 price peak, but this time I increased purchases by 50% from the standard purchase size. Here are the purchases:
August 18, 2021
– 12,384 shares, £ 140 (breakeven point 1.195p)
August 21, 2021
– 12,968 shares, £ 140 (total 25,352 shares, £ 280, breakeven 1.136p)
September 15, 2021
– 10,941 shares, £ 120 (total 36,293 shares, £ 400, breakeven 1.1242p)
These were sold on October 25, 2021 for a profit of 8.5%. The purchases met the rule that they should reduce the total holding on average.
ZEN is a low volume business with a steady flow of news. I did not see low volume as a barrier not to invest since buying in volume allows me to gain exposure and capitalize on the opportunity but in a size commensurate with recent market activity in ZEN.
– Find previous articles from Moosh’s blog here
As the ZEN price increased in October, it was useful to watch the trend as the volume exceeded the 20-day average volume in the following days after my last purchase:
September 16, 17, 21, 24
October 6, 12, 18, 22, 25
Turn up the sound – Blog entry from December 20, 2021
Identifying trends – Blog entry from December 22, 2021
The views of the writer are his own and not a representation of those of South East London. No advice is deducted or given. If you need financial advice, please consult an independent financial advisor.