Glencore's route to a record high
17th October 2018 08:59
by Alistair Strang from Trends and Targets
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Many analysts are bullish on the mining sector but, after a challenging year so far, are things looking up for this heavyweight? Alistair Strang digs deep for answers.
Glencore (LSE:GLEN)
This share reveals a peculiar in-house bias. Essentially, none of us trust shares with four character epics! Indeed, even those with two characters and a dot are hated. Sloppy naming conventions make writing analysis software a bit of a nuisance at times.
Seriously, few things prove more capable of introducing hysterics to a web page than BP. for instance. A simple chart graphic immediately refuses to display, the internet failing miserably when challenged with "BP..jpg"!
Aside from this ridiculous rant, how are things looking for Glencore?
Confusing is the obvious answer and probably more tainted with worldwide market potentials rather than any Brexit threats.
To get the headline numbers out of the way, the share price requires actually close below 256p to allow a surfeit of concern.
Until such a point, everything else is just distraction as the price trades in a zone where 440p is a medium-term ambition with secondary, if bettered, at 562p.
When we review the downtrend from 2011, the price has broken through and performed fairly well. Unfortunately, experience teaches us that a fairly sure signal for abandonment of big picture upward targets comes, if a share is unlucky enough to close a session below the point of a major historical trend break.
In the case of GLEN, we've circled this at 256p. Quite amusingly, the market also opted to gap the price above this trend.
For now, a couple of problems appear likely.
We already view it as heading to 259p, dangerously close to our closing price (that's really important) drop trigger of 256p. The share price, presently trading at around 315p, needs better than 342p to give the first impression 259p shall not appear and scare the pants off long-term traders.
What happens with closure below 256p?
Initially, we shall be looking for reversal to 200p along with a very probable bounce. But if broken, secondary calculates at 134p.
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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