[isatrader]

In the book he mentions how fundamentals don't come into it when one 'reads the tape' and that companies with lousy fundamentals can be great technical stocks.

OCADO (OCDO.L) is one such example. It's handed out five years of audited results and every single one has made a loss. The EPS is utterly dire and plummeted to new depths this year and basically in fundamental terms it's an utter and total basketcase. But it's a different story according to the book because one could have got in at around 90s in the spring of last year, perhaps got in again at 150 in the summer of last year and now, six months later, with the company doing dreadfully one could be selling the shares at 500 - over five times the price paid this time last year.

Utterly amazing and, yes, I will be the first to admit that I have had two very unsuccessful attempts at laying this company by going short at around 360.

Anyway, Ocado just goes to show that one doesn't need the fundamentals to follow the tape.

I think you're maybe being a bit harsh on it in saying that it's a utter and total basketcase in fundamental terms as it's continuously grown it's Revenue for the last five years by over 100% from 321.31m in 2008 to 678.60m in Dec 2012, and it's pre tax profit has improved each year and was only just under breakeven at -0.60m in Dec 2012, up from -33.30m in Nov 2008, and so imo this growth towards profitability has been a big driver of it's Stage 2 advance over the last year or so, as people have probably bought into the stock in anticipation of it becoming profitable in 2013/14 and continuing it's strong growth. But we'll get the next look as to whether they are going to achieve this with their 2013 results on 04 Feb 2014.