Next: How you'll know the share price rally is over
Up over 40% in 2019, Next is one of the best retailers around. Here's when we'll know the fun is over.
9th April 2019 12:34
by Alistair Strang from Trends and Targets
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Up over 40% in 2019, Next is one of the best retailers around. Here's when we'll know the fun is over.
Increasingly we find ourselves issuing a warning regarding our target levels. Regardless of whether we're talking Big Picture such as with Next (LSE:NXT) below, or reviewing near-term potentials, something important keeps making itself know with price movements.
We prefer to give two target levels, the first essentially providing a point where some volatility is expected in a price. This is designed to allow the trader to bank profit, then theoretically re-enter the trade later to make an attack at the secondary target.
We've noticed that when the market opts to move to our initial target, if the first surge exceeds the initial target level, an attempt at our secondary target level is almost certain.
This rule is being applied, both with up and down movements.
In the case of Next, the visuals indicate it is worth paying attention to 5,765p as any trades now beyond such a point suggest coming growth to an initial 6,147p.
Due to the presence of prior highs in 2018, we would anticipate a stutter at such a level. If exceeded, our secondary longer-term target calculates at 6,452p and a new multi-year high.
The share price needs to break below 5,040p (red on the chart below) to cancel optimism.
Source: TradingView 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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