This is a game changer for Sports Direct shares

This well-known pariah has surprised many. Our chartist looks at the sports retailer's potentials.

Sports Direct International (LSE:SPD)

Sometimes we're surprised at the sheer speed of a price movement, when criteria are satisfied.

In the case of Sports Direct (LSE:SPD), our analysis in September suggested price levels above which the share almost "had" to move. It moved and now, resides in what's commonly called 'game changing' territory.

• Here's how Sports Direct shares could surge

To be fair, it's ALMOST in game changing territory. There's a tiny little problem with the price visuals and it relates to a downtrend which began in April 2014. 

Currently this trend line is at 474.736p and the market opted to close Sports Direct at 472.2p. It's almost like someone had a crayon, drew a line, and said "No Further!". 

If the situation is indeed to prove game changing, the first box we require to be ticked is of the share price actually closing a session above the blue line on the chart.

The immediate situation gives some hope as movement near term exceeding 476p is supposed to head upward to an initial 512p. 

If we play safe and sane, only with moves beyond 512p dare we believe future recovery to an initial 564p makes sense. 

If exceeded, our big picture secondary calculates at 698p and visually, this sort of level appears to be a glass ceiling in waiting for the future.

At present, it's pretty difficult to define a danger level for the price. Movements since September suggest the share requires below 290p to justify panic as this could easily provoke a reversal cycle to 144p. 

We'd suspect the company would need to announce a sponsorship deal with Russian athletes for the forthcoming Olympics, if they're serious about driving the price down. 

For now, quite a lot of hope remains for Sports Direct share price and we think it shall prove a matter of patience, along with positive overall market conditions.

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.