A mid-cap share flashing red
4th October 2018 08:29
by Alistair Strang from Trends and Targets
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There's a real risk here that five years of dramatic share price growth could unwind very quickly, warns technical analyst Alistair Strang. Here's how.
A diagnosis of Celiac disease ended a habit of worshipping at Greggs' lunchtime shrine. The intervening period saw the company's fortunes suffer dramatically as their share price moved from 4 quid to 14 quid! Clearly our business was not important to them…
All joking aside, there's something happening at present with the share price, sufficient to raise an eyebrow. It appears weakness now below 1,038p risks driving reversal to an initial 1,002p.
While, in the grand scheme of things, such a movement can be ignored, there's a greater problem if 1,002p breaks, thanks to our secondary target lurking at 952p.
For us, this is quite a problem as it risks allowing the share to actually close a session below the red uptrend since 2013. At time of writing, this particular uptrend is at 961p.
The implicit risk, if the price closes below 'red', is of any negative news report being capable of reversal toward 716p in a blink. And should 716p break any time in the future, the big picture secondary is at 368p, effectively turning the growth during the last five years into a good dream, one which vanished.
At present, Greggs is worth watching and for none of the right reasons. We've circled a movement earlier this year, one of these careless bits of manipulation which suggests the market wants the price down.
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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