Alarm bells ringing at Melrose Industries
This FTSE 100 company's share price has reclaimed much of the ground lost since announcing a disappointing revenue outlook in March. But independent analyst Alistair Strang has concerns.
5th November 2025 07:05
by Alistair Strang from Trends and Targets
When calling up the chart of aerospace business Melrose Industries (LSE:MRO), there was a feeling of something not being right and, for us, this was typified by their share price movements this year. The price has certainly been on a crazy ride, giving a few reasons for concern.
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From our perspective, the first alarm bells rung with the low of 376p in April of this year. Essentially, the share price should not have dropped as far, breaking below a calculated drop target of 393p, the price level from which a rebound should have been mandatory. Rather gently, this caressed the first bell.
Last month, on 17 October, the share price was gapped down at the open, managing to close the session below the immediate Red uptrend. Our second alarm bell tinkled. And on 4 November, the share price again broke the Red uptrend but the market was careful to ensure it closed the day at 620.8p, exactly on the uptrend with almost fascinating precision. Another alarm bell gives a tentative ding.
This, unfortunately, is how things work out in our profession, a constant search for signs of weakness or signs of strength. Sometimes, it even works out, and this is why we’re often completely paranoid about micro-movements that sane people ignore!
If we fall down on the side of optimism, it appears we dare not trust Melrose until such a point where their share price closes a day above 650p. Such an event is liable to prove quite exciting, calculating with the potential of a lift to an initial 717p with our secondary, if exceeded, working out at 738p, along with the need for us to take a hard look at our Big Picture tea leaves.
However, with alarm bells tinkling, we are concerned at the share price dance steps recently as they could easily indicate trouble. The immediate situation threatens reversal below 591p triggering a drop to an initial 507p with our secondary, if broken, calculating at 366p.
From our Big Picture perspective, this would be a really bad show, placing the share price in an absurd zone with the risk of a future 81p making itself known. Obviously, not a single domino has dropped making this absurd sounding target make sense, but it does show how fragile a share price can be if anything negative occurs.
Source: Trends and Targets. Past performance is not a guide to future performance.
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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