Berkeley Group: Have results just delayed a big drop?
Its shares did well following yesterday's results, but this analyst's charts suggest all is not well.
20th June 2019 09:56
by Alistair Strang from Trends and Targets
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Its shares did well following yesterday's results, but this analyst's charts suggest all is not well.
Sometimes, the stock market loves its little "gotcha" moments and we suspect the Berkeley Group (LSE:BKG) share price is about to illustrate this nasty trend.
After announcing a slump in annual profits, a bunch of traders doubtless expected the share price to follow the trajectory of a brick dropped from a height. Instead, the share closed the session down just 0.2%!
Does this mean Berkeley's share price is concealing inherent strength, especially as it reached a high of 3,777p during the session, closing at 3,552p eventually?
We really doubt it, instead suspecting the market has simply delayed the drop until sufficient number of investors reassure themselves Berkeley is "safe", a concept reserved for the ridiculously naive when discussing share prices.
Instead, the suspect is it shall prove worth watching for movement below 3,441p anytime soon, as this should drive the price down to an initial 3,352p. Secondary, if (when) broken, should be 3,221p and hopefully a bounce.
Unfortunately, there are some fairly severe longer-term implications should 3,221p break, as it will take the price into "lower low" territory, as a consequence forcing us to accept a calculation of 2,680p as the eventual bottom ambition. This would also match the uptrend since the start of price recovery from 2009's fun and games.
It's pretty amazing we still must regard an event 10 years ago as the benchmark for current share price movements.
For BKG to signal it's climbing out of trouble, the price currently needs exceed 'blue' on the chart, 3,890p at present.
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, or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea.
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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