Burford Capital: The share price outlook for 2019
Its share price is essentially treading water, but our chartist has spotted a problem.
5th April 2019 09:57
by Alistair Strang from Trends and Targets
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Its share price is essentially treading water, but our chartist has spotted a problem.
Burford Capital Ltd (LSE:BUR)
We've had a few puzzled emails regarding recent price movements against Burford Capital (LSE:BUR), all essentially asking if we can make some sense of what's going on.
Price movements during the last few years certainly commend the company and it's showing some extraordinary strength for the longer term.
Of course, there's a problem and we've circled it on the chart.
Last year on December 18th, the market opted to "prove" the uptrend can be broken. On closer examination, this proved to be a classic "gap down, gap up" dance step, the gaga.
Executed in this fashion, they invariably point to good times ahead, something the share price provided - by moving from 1,288p up to 2,045p in just three months.
The problem occurs when we look at our calculations for the future.
Firstly, software demands the price exceed 2,076p, the high of last year, before trusting future growth as this calculates with a sane looking 2,182p potential.
If exceeded, our secondary computes at 2,821p which is a puzzle, if only because the upper target (trust us, if this appears, the price almost must reverse) is an anagram of the initial target level.
This sort of coincidence happens surprisingly often and we've no idea why. We'd certainly advocate some caution around the 2,450p mark, simply due to half way levels often providing hesitation in a rising cycle.
For now, it feels like the price is essentially treading water, needing below red at 1,500p currently to justify weakness down to 1,407p initially.
If broken, secondary is at 1,189p. This represents a level which, if achieved, demands some sort of bounce should occur.
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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