Despite the well-documented laments from the market about woeful undervaluations and that many stocks are sitting ducks (as evidenced by takeover after takeover), there is still plenty of volatility and opportunities to trade. However, a knowledge and understanding of specific stocks is required in order to contextualise any new information.
For example, Oxford Biodynamics (OBD) has seen a rise of nearly 400 per cent in the space of six sessions. The catalyst? A news announcement informing the market that the company’s EpiSwitch prostate screening (PSE) test was 94 per cent accurate compared with the current blood screening test (the PSA) used in the NHS, which is only 55 per cent accurate, and “considered unreliable by many doctors”. The price jumped from a closing price of 10.5p to an intraday high of 39p within two sessions. A subsequent news release pushed the shares to a high of over 50p.
Prior knowledge of the company and its products (and what they do) is helpful here. While at first glance the news may be good, those who know the company well will have been in pole position to capitalise on the news announcement. This is why I believe anyone who wants to make a living from the stock market needs to professionalise their approach. It means becoming an expert in the market you trade, knowing the narrative of stocks in your market as well as what the companies do, and keeping on top of their journey. That way, when something truly game-changing appears, you’re ready to pounce and take advantage.