Analyst explains outlook for Galliford Try shares

by Alistair Strang from Trends and Targets |

The sale of Linden Homes and Galliford Try Partnerships complete, what now for Galliford shares? 

Galliford Try (LSE:GFRD) 

Despite a company name like a quaint pub, beside a slow river on a summer day, Galliford Try's (LSE:GFRD) share price moves are proving less than alluring.

Our previous report was loaded with concern as the share price risked a traumatic drop. Starting this year with reversal from eight quid to 103p justified our concern, along with raising further concerns for the future [the sharp drop in share price was triggered by a readjustment following the sale of Linden Homes and Galliford Try Partnerships to Vistry Group (LSE:VTY), formerly Bovis Homes].

Shareholders are probably pretty aggravated about both the drop and the method employed. The share price was gapped (manipulated) upward above the downtrend since 2017, midway through last December.

Generally, this sort of price movement gives considerable optimism for the longer term, indicating the market wants the price to head upward. Of course, in this instance, the official share exchange ratio & listing details announcement at the start of this year explains the share price fall.

By any standards, price movements have become messy and the share needs above 173p to give hope of recovery up to an initial 211p. Above 211p and we shall need revisit the numbers.

The "bottom" of 103p achieved at the start of this year was, according to our calculations, pretty concise. GFRD cannot afford movement below 103p at present as we cannot calculate further drop targets.

With a share price being moved down, exactly to the 103p level, we've some hope the price shall simply mess around until news flow from the company provides genuine force to drive the share.

As a result, weakness anytime now below 150p risks reversal to an initial 138p. If broken, secondary is at 120p and hopefully a bounce.

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, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation, and is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

get more news and expert articles direct to your inbox
Sign up for a free research account and get the latest news and discussion, and create your own Virtual Portfolio
sponsored articles from our partners