Dunelm shares: are we about to see an all-time high?

With retail open for business again, our chartist sees if Dunelm shares are in a comfortable position.

Dunelm (LSE:DNLM)

At times, it's suspected the term "soft furnishings" had provided the primary reason for a rise in allotment use, sheds, Harley Davidsons, and so-called man caves.

It's possible a fairly large section of the population just don't 'get' why cushions and throws are so important, thus choosing to protect their sanity by doing something else.

From a personal viewpoint, stores such Dunelm (LSE:DNLM) and Ikea represent an encapsulation of hell, but we've eventually discovered a compromise. I could go to a bookstore, B&Q, a marine chandlers (this is always a favourite), needing only a text message to return the car park outside Dante's Inferno.

With the outbreak of coronavirus, it was a welcome respite not having weekends utterly ruined by shopping and, somehow, the last three months has not featured a shortage of cushions or curtains.

However, given the news regarding companies like Intu (LSE:INTU) (the shopping mall people), it made a lot of sense to review how Dunelm's share price is looking.

Surely store shutdowns, along with a huge expanse in online shopping habits, will be provoking troubling potentials for Dunelm, the soft furnishing people.

It's time for a deep breath as Dunelm appear to be bucking the trend.

Their share price has already come within reach of pre-Covid-19 prices and now, movement above 1,263p should prove capable of a reach to 1,320p.

While there is a visual implication of a glass ceiling forming at such a level, in the event the share price closes above 1,320p, it enters a cycle toward a new all-time high of 1,510p.

Movement such as this is liable to prove pretty significant, taking the price into a region where the big picture suggests 1,893p shall present a longer-term attraction.

Who knows, perhaps the UK shall go mad, panic buying 'scatter cushions' with similar aplomb to toilet paper, once lockdown ends.

Dunelm shares need to fall below the blue line on the chart below to provide sufficient reason for panic, presently at 950p.

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.