Are happy days ahead for Diageo?
Independent analyst Alistair Strang examines the drinks giant after recent results.
6th August 2025 08:14
by Alistair Strang from Trends and Targets
The last three years has seen some truly dreadful behaviour by Diageo (LSE:DGE)’s share price, moving from the £40 level down to below £20, giving the visual impression of being a complete dog of a share.
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It has been a difficult journey, placing the share in very real danger of returning to levels not seen since 2009. Perhaps it will prove the case that their recent results and optimistic outlook will provide an arrest from the force that feels like it’s driving the price to the gutter.
There is a danger that price movement below 1797p will provoke reversals down to an initial 1492p, a potential fake bounce, but if 1492p is broken, our eventual “bottom” calculates at a ridiculous-sounding 871p.
Unfortunately, visually it isn’t ridiculous, your imagination not needing to be greatly stretched to accept the potential of such a vile, low level for the price.
Source: Trends and Targets. Past performance is not a guide to future performance.
However, the release of results and subsequent 4.9% gain over the session, tends to imply the market will be quite happy for Diageo to escape its cycle of doom.
Should the share price continue to display some optimism, above 2072p has the potential of triggering gains in the direction of 2590 next with our secondary, if bettered, an amazing (and perhaps difficult) 3184p sometime in the future.
Our problem with this secondary level is that it substantially exceeds a hypothetical 2727p, the level of the trend break of red on the chart. In a scenario where Diageo exceeds such a level, our conventional logic suggests happy days will be ahead for the share, the price theoretically absorbing a power to once again rejoin the red uptrend.
We suspect that interesting times may be ahead for this price.
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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