Aviva’s share price hits pre-pandemic levels – but what’s next?
The FTSE 100 could see the hesitation experienced by the insurer, our columnist believes.
25th May 2021 08:51
by Alistair Strang from Trends and Targets
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The FTSE 100 could see the hesitation experienced by the insurer, our columnist believes.
Aviva Plc
The share price of Aviva (LSE:AV.) is currently experiencing the hesitation we anticipate from the FTSE 100 at some point in the future, which increasingly feels very far away.
Its share price has managed to equal the pre-pandemic high, spending the last few months stumbling around uselessly, obviously in shock at the temerity of its actions.
We hesitate to use phrases like ‘a sure thing’, but when we examine this movement model on international markets we're able to give an interesting potential.
It is also worth remembering the company is scheduled to issue a trading statement this Thursday.
Presently trading around 406p, the share price only needs to exceed 421p to trigger some interesting recovery. Above 421p should look for gains in the direction of 473p, with our longer-term secondary calculating at a solid-looking 500p.
Obviously, this assumption is based on what happened with similar shares internationally, when they finally broke above the pre-Covid highs of February 2020.
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It's something of a surprise to note this scenario allegedly has a long-term attraction coming from 671p, a price level absent from Aviva since 2008. We're less than convinced at this potential, but the arguments favouring 473/500p are proving strong.
If we chose to look at the dark side, the earliest warning for things going wrong for Aviva shall come if the share price manages to trade below 373p.
This risks trouble as we can calculate an initial target of 331p, a level at which we'd hope for a rebound. If broken, our secondary calculation works out at 298p and represents a point where we shall need to review all the numbers 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.
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