Interactive Investor

Amigo Holdings: is there hope for this bombed-out share?

Shares in this sub-prime lender have been a disaster since its IPO. Our chartist looks for positives.

9th July 2020 08:42

Alistair Strang from Trends and Targets

Shares in this sub-prime lender have been a disaster since its IPO. Our chartist looks for positives.

Amigo Holdings Plc (LSE:AMGO) 

We've received numerous emails recently regarding Amigo Holdings (LSE:AMGO). Its share price is troubling, managing to actually trade below the Covid-19 market drop, a pretty unusual state of play and one which doubtless justifies the questions being asked.
 
Our "ultimate bottom", the level below which we cannot calculate, worked out at 10.6p, with the initial Covid-19 drop almost exactly hitting this level.

To be pedantic, the share price actually achieved 10.48p before experiencing a pretty reasonable rebound to 35p.

And then, it all fell apart! In the couple of months since that high, the share price dribbled downhill remorselessly to finally find some sort of excuse for a rebound at 5p.

In the days since, the bounce has lacked conviction, with the share price fluttering around the 13p level.

At present, the price needs to exceed 18.8p to give hope for some reasonable upward travel, as this now calculates with an initial ambition at 26p.

If bettered on any initial surge uphill, we can provide a secondary target at a more reasonable 41p.

In fact, with some positive news, the price could find itself troubling the 59p level, a point where the visuals suggest some hesitation awaits.

Only with closure above 59p will the chance of some real miracles appear, requiring further analysis of price movements thanks to longer term growth potentials becoming quite vivid.
 
Of course, there's a "however" due to the fragility of moves accompanied by the important detail of the price eventually drifting below our "ultimate bottom".

About the only thing we can suggest, viewing downside potentials, is to take a loan, buy some Nike running shoes, and prepare to flee, should it ever get below 5p again!

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.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

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.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

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