Are Synthomer shares about to bounce?
4th August 2022 09:18
by Alistair Strang from interactive investor
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Independent analyst Alistair Strang shares his view on possible next moves for the UK polymers firm.
From a personal perspective, I can confirm that polymer company Synthomer (LSE:SYNT)'s bitumen adhesive works well, but unfortunately, the markets look a bit nervous in the way their share price is moving.
Since 2014, there’s been a visual promise that the share price has a logical “floor” around 190p and once again, the market is tap-dancing at this level. Doubtless, a bunch of folk will be anticipating a bounce anytime soon but unfortunately, we are starting to develop some doubts.
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The ongoing problem with “glass ceilings” or “floors” is fairly brutal. They usually break around the third or fourth time they are assaulted. Currently, the price is, for the third time, engaging with this hypothetical floor, but unfortunately, the share price has also dripped below the red uptrend on the chart, a line which dates back to 2009. Basically, all the pieces are in place for a loss of confidence for any immediate bounce.
Thankfully, the curious series of movements since the pandemic hit tends to suggest ongoing weakness below 192p should hopefully “only” provoke relaxation to 169p and hopefully a proper recoil. Our secondary target level calculates at 159p, virtually the same number. We literally cannot calculate a bottom number below 159p. This results in a scenario, by our own in-house rules, of a strong expectation for a bounce, ideally just above the 169p level.
In the event everything intends to suddenly go right, the price presently needs better blue on the chart, currently around 260p, to enter a cycle that gives a vague promise of a distant 468p.
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.
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