A hint that this FTSE 250 share can stage recovery
After slumping on disappointing half-year results, independent analyst Alistair Strang looks at this billion-pound company's share price for signs it can quickly regain altitude.
30th May 2024 07:48
by Alistair Strang from Trends and Targets
It transpires there’s a reason for the sameness around the world, a feeling of familiarity among many airports often giving a distinct feeling of déjà vu. The culprit is FTSE 250 company SSP Group (LSE:SSPG).
Describing themselves as "the food travel experts...the best part of the journey", their varied brands of shops and food courts decorate airports, rail stations, even some motorway service stations, in 37 countries worldwide.
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It’s a bit amusing as airports are a single place where visitors only want one thing, to get out of the place. Yet this company has carved itself a niche market and, despite the decline in air travel, continue to expand most recently into Indonesia.
We admit to stalking aviation related companies in the hope of discovering the gem which shall give an early clue that the airline market is about to start some proper recovery. After all, it makes sense the enforced petri dish of mass travel shall probably experience rapid acceleration when things finally kick off.
Alas, our immediate review of SSP Group's chart fails to yield any immediate succour, but there is a small hint, needing very little movement, which should give an initial indication that SSP may be shuffling into position for some recovery.
We’ve an immediate scenario which proposes above 179p should prove capable of triggering an initial tame recovery to 186p. While in itself, such a pathetic movement is useless to traders, it should recover the share price above the Red uptrend since the manufactured pandemic low of 2020 at 136p.
The years since have seen many false starts, similar to the airline industry, but we shall now be especially interested if this once again regains the uptrend. In a box ticking contest, movement such as this shall definitely tick the first box.
Only if the price manages above 186p do we expect things to become useful, giving the potential of a continued rise to an initial 214p with our longer-term secondary, if bettered, at 230p and some potential hesitation due to the price finally beating a downtrend since 2021.
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However, there is a remaining problem, and it’s the cycle upon which the share currently finds itself. It is trading in a zone where reversal below 160p threatens a trip down to 136p and a mirror image of the low of 2020.
Hopefully, it would discover the means to display a bounce from such a level as our secondary, should the initial break, works out at 111p and the suggestion of a future in the wilderness. But for now, we’re keeping an eye on them and hoping this share price shall prove capable of warning the aviation market is finally sharpening its fangs.
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.
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