Has Westminster Group impressed us?
16th June 2021 07:36
by Alistair Strang from Trends and Targets
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After this AIM stock's share price just received a big boost, this analyst studies the charts to assess potential for more gains.
Westminster Group’s (LSE:WSG) specialist subject is strategic security for many countries. The company website certainly “talks a good game”, making us puzzle how a share which once traded up at 95p is now floundering down at the 5.58p level.
While some research is probably merited, from our perspective we’re more than a little bit curious as to the relatively near future, thanks to the price enacting a Gap Down at the tail of 2020, followed by a Gap Up this week. Traditionally, when we see this sort of thing, it’s generally safe to anticipate a price getting ready to experience some irrational recovery.
It’s easy to believe market thinking was something along the lines of:
November 2020: “Westminster blotted their copybook. Punishment by forced the share price down.”
June 2021: “Oops, looks like we overcooked the punishment. Best force the share price up to cover the error.”
Despite 15 June presenting the market with a 41% gain at the end of the day, thanks to a large airport contract from The Congo in Africa, we’re not convinced the party has actually started.
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As the chart highlights, there is a very obvious downtrend which started nearly two years ago. Price movements on the 15 May certainly came close to the trend, but even the high of the day at 5.78p failed to convince us happy days are ahead. In fact, we’ve a suspicion the share price shall require being “gapped up” again if the market is really serious about getting things moving.
Source: Trends and Targets. Past performance is not a guide to future performance
The numbers are pretty complex against this, thanks to the gap (manipulation) movements throwing a spanner in our works. Immediately, there’s a demand price movement above 5.95p must almost certainly bring the share to an initial 6.65p. From our software perspective, we expect some hesitation at such a level unless the price is forced upward by a gap. Only above 7.3p dare we believe things shall become truly interesting, this being the trigger level which calculates with an initial 8.8p with secondary, if bettered, a longer term 11.25p.
If ever a share needed a Four Leaf Clover for luck, Westminster are certainly in pole position. Their share price needs to tumble below 4.95p to ring the first alarm bell, warning things may not be going as planned.
Our inclination is of hope for the future of Westminster Group.
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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