Is now the time to buy Fevertree shares?
29th November 2018 08:55
by Alistair Strang from Trends and Targets
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Its shares had almost halved in value since September, and bargain hunters have been burned already, so technical analyst Alistair Strang tells us what his software predicts for this AIM darling.
Fevertree (LSE:FEVR)
This lot are exceedingly popular with the CFD community and, thankfully, the short scenario presented last month has worked out with a fair degree of accuracy. But we're picky and it did break below our drop target [2,226p] by 11p during trading to 2,215p. For this reason, we can express further concerns for the future.
The immediate situation is not encouraging.
Apparently, any bounce continuing beyond 2,380p should attain 2,584p. While a two quid rise potential is slightly useful, in no way does it return the share to the land of hope.
Only if above 2,584p dare we hope for a miracle rise continuing to 2,899p, safely above the historical uptrend.
- Taking advantage of Fevertree's latest plunge
- Fevertree: Should you buy the correction or listen to alarm bells?
To be blunt, this sort of thing happens only rarely and we still wonder above the circled spike below the trend on October 11th. If this indeed proves to be an early warning signal of a loss of confidence, the situation now risks travel below 2,215p leading the price downhill to an initial 1,854p.
Visually, common sense almost demands some sort of bounce at such a point. But should 1,854p break, secondary calculates now at a bottom of 1,142p.
For now, we strongly suspect 1,854p shall prove the market's intent.
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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