Interactive Investor

Liberty Media shares get interesting ahead of Monaco Grand Prix

26th May 2022 06:57

Alistair Strang from interactive investor

Shares in the owner of F1 have been a great performer since the pandemic. Independent analyst and F1 fan Alistair Strang looks at the odds of a long-lasting rally following a recent dip from record highs.

We did promise to go easy on Formula 1 coverage but, as it’s the Monaco Grand Prix this weekend, perhaps a glance at how the owners of Formula1 are doing is justified.

Oddly, choosing Monaco as an excuse to delve into things is a bit of a misnomer. Of all the races, Monaco is traditionally the one most likely to send viewers to sleep. Generally, all the action happens during the preceding day with qualifying as the “race” tends become a boring procession of cars unable to pass each other.

Some slight excitement is usually generated with the occasional mechanical failure but that’s about it. Unless the organisers adopt a cunning plan of spraying water across a few corners to spice things up, the boring stream of cars unable to pass each other, will once again dominate Sunday afternoon. The venue is certainly spectacular, the pit lane audience glamorous, but attaching the word “race” to the weekend is traditionally an exercise in futility.

A couple of recent share price movements for Liberty Formula One Group A (NASDAQ:FWONA) appear worthy of some consideration. At time of writing, the share is trading around $57 and just needs above $59 to hopefully trigger price movements to an initial $65 with our longer term secondary, if bettered, calculating at a confident looking $73.

But in recent weeks, the Red uptrend has suffered a couple of assaults, not least thanks to heroic levels of incompetence in management of the new US Miami GP. As the fallout has cleared, Liberty's share price has once again regained the uptrend with extreme care is being taken to ensure the price doesn’t close a session below Red. Hopefully this indicates an expectation of future gains.

Source: Trends and Targets. Past performance is not a guide to future performance

If trouble is planned, the share price needs to slump below the Miami low of $50 as this risks triggering reversal to an initial $37. Below such a level, things get silly as our secondary works out at a bottom of just $18.

When the pandemic low of 2020 is taken into consideration, proposing a visit to the 18 dollar level becomes less foolish. However, our expectation is to see an eventual visit to the $73 level.

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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