the week ahead

The coming week should highlight the underlying sentiment (and level of support ) for VPG.

The US markets were up strongly on Friday, closing at the high of the day (and week) and comfortably above the 50% retracement level of the 08 highs and march 09 lows, and now 1.5% below its 52 week high ? these are all VERY bullish signals and the bulls will now push for a new 52 week high . Note our futures closed up some 65 points (1.36%) overnight and are now 100 points (2%) below the 52 week highs, an 8% run in the last 2-3 weeks. Note that the underperformance of VPG, over the same period, will not be overlooked by the instos / and relative value traders (see last paragraph).

Expect our markets to open strongly, and for every stock ? dogs and all ? to get a lift on open (emotional money buying). Remember all boats rise with the tide, so don?t get caught out thinking everything is ok again early on ? there will be sellers lurking in the background to take advantage of this initial lift (next paragraph again). The tell tale sign of support for VPG will be over the coming days, if it manages to get back to 10c and hold ? this is positive. Getting buyers at 10.5 in the near term (unless spruikers on low volumes) is going to be extremely difficult - so 10c looks to be the current short-term ceiling.

Note though, that instos / traders / tech analysts will be looking for relative value outperformance within their REITs allocation and overall portfolio allocation. Therefore If they believe that VPG has limited upside at the moment, they may sell down part of their holding and move into the likes of MGR or take up Lend Lease rights offer etc ? this relative value switching may keep VPG flat or even put negative pressure on the stock while the rest of the market rises (note ERA and TLS). This phenomena often confuses less experienced traders who buy in expectation ? it?s cheap and the market is rising? - it has a lot to do with relative outperformance metrics. The good news to this is that once the others have had a good run, instos / traders / techies will take profits and come back to the undervalued ?out of favour? stocks pushing them up strongly to catch up with their peer stocks.

Enjoy the VPG ride and never concentrate your positions in too few stocks or in a single sector
Cheers