VEBLEN WINES LTD
Fine Wine Merchant
"ACCOUNTABLE, PERSONABLE AND DEPENDABLE"
01622 672 314
est. 2008
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WHY INVEST IN FINE WINES?
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Financial protection from potential global recession and inflation. Low Correlation to equities and Bonds.
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Proven track record as a safe haven against other asset classes, equities and bonds.
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Recent negative correction since 2011 affords great value entrance to this market and positive data to outperform the 25 year CAGR. 2023 Is showing support levels in place currently after recent downturn.
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Growing demand from worldwide buyers.
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Stock integrated with Liv-Ex exchange. Instant settlement terms apply.
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The Fine Wine Investment market for Bordeaux – France, has shown a CAGR of 12.9% over a 25 year period, outperforming most major asset classes. (subject to change)
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Tangible Asset, Finite Supply and Veblen Wines Service.
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Full Title and Risk*
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Prices of fine wine are rising again after a recent correction, see charts below as of 04/01/2024.
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Advice on when to Buy, Hold or Sell.
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Performance based fee so we are invested with you.
Liv-Ex Analysis;
Above we can see that the price of the Liv-ex 50 has been falling since its top in September 2022. The recent price action broke not only through the Simple Moving Averages (SMA) 7 months and 20 months, but more importantly the SMA50 and the long-term primary trendline initiated in 2005.
This is a major threat to the index’s long-term bullish trend. We have not yet seen a re-test of the long-term ascending trendline; on the contrary, the price has now dropped below the 2018 highs.
Since its 2021/2022 highs, the Liv-ex 50’s price has so far seen a 15% correction. Was there any way we could have anticipated this drop and sell the Index or hedge long positions?
The Relative Strength Index (RSI) showed a bearish divergence with the Index price for most of 2022. A possible entry for a short position could have been when the RSI validated the divergence at the end of December 2022. Since then, the RSI plunged to oversold levels and remains extremely low. However, taking a counter-trend position on the back of a sole divergence when the market has been bullish for such a long time is risky, and technical analysts would prefer to see the price also confirming a trend reversal before doing so.
On the monthly chart, the ‘obvious’ signal to enter into a short position was the break of the long-term ascending trending line around 365 in July 2023. Let’s review the price action on the weekly timeframe to see if it presents earlier entry opportunities.
At the end of September 2022, we can see strong bearish divergence between price and RSI. From here, we will be trying to ascertain whether the ‘high’ of the 29th of September 2022 can be a potential price top. Subsequent price action (eg. a series of lower lows and lower highs, SMA bearish crossings, etc) will give us the answer:
30/09/22: The RSI bearish divergence is triggered.
4/10/22: Price breaks the SMA7.
6/10/22: The RSI re-tests the ’70 line’ (or overbought zone) and fails.
12/10/22: Price breaks the SMA20.
28/10/22: Price makes lower lows and lower highs (Dow theory), confirming a reversal of the short-term bullish trend.
4/11/22: Price re-tests the SMA20 and the top line of what is now a validated bearish channel.
11/11/22: Price re-tests the bottom of the horizontal support zone (in yellow) and, thereby validates the adjacent side of a descending triangle.
19/11/22: Price falls below the SMA7, 20, and 50, which alignment evidence bearish trending (dead cross).
22/11/22: Price breaks the triangle below the horizontal support of 408, and price accelerates downwards.
Enter into a short position (sell) at 407.73.
Stop Loss (SL) at the initiation of the trade = 413 (i.e. above the recent top)
Take Profit 1 (TP1) = 385 (lower monthly BB); TP2 = 365 (long-term primary trendline); TP3 = 325 (slightly above March 2020 lows).
Trailing SL = 362 (above the horizontal trendline)
