Aviva: can its shares climb out of the muck?
Since the March drop the shares have failed to gain traction. Our chartist looks for a catalyst.
25th August 2020 10:14
by Alistair Strang from Trends and Targets
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Since the March drop the insurer’s shares have failed to gain traction. Our chartist searches for a catalyst.
Aviva plc (LSE:AV.)
The UK's largest insurer and pension provider, Aviva (LSE:AV.), was an early adopter of the policy to suspend dividend payments in 2020.
This stance has apparently increased the group’s capital ratio to 182%, hopefully a sign of health for the future.
However, they recently opted to cough up a 6p per share dividend at the end of September, giving us an excuse to speculate on future share price movements possible before the ex-dividend date.
Since the Covid-19 share price drop in March, Aviva's share price has behaved as poorly as a retail bank, failing to gain sufficient traction to clamber out of the muck.
Presently trading around 286p, the share price requires above 313p before we dare believe it has made a triggering movement, one capable of driving recovery to an initial 348p.
If exceeded, our secondary calculation works out at a rather more positive-sounding 426p, a number which our software advises we should be confident about!
Visually, there is certainly ample reason to suspect some hesitation should 426p make a guest appearance as this almost matches the price level pre-Covid.
For it all to go wrong for Aviva their share price needs to dip below red on the chart, presently at 214p.
Such a movement will suggest reversal to a bottom, hopefully, of 128p. We cannot calculate below such a price level.
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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