Price target for Glencore shares as activist calls for Aussie move
Opinion about Glencore is split, with some analysts in the City rating the shares a buy, while an activist investor is calling for the miner to move listing. Independent analyst Alistair Strang reveals what his charts say.
14th March 2024 07:36
by Alistair Strang from Trends and Targets
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The London Stock Market continues to attract unfavourable opinions, with Glencore (LSE:GLEN) being the recipient of a rather nasty letter from a major hedge fund, described as an “activist investor”. Their letter starts with "London is no longer the home of mining," going on to expand with reasons Glencore should move their listing from London to Sydney, Australia.
It’s hard to disagree with some of the points the investor makes and, arithmetically, we find it hard to disagree with the notion the company share price is underperforming. We’re not convinced such a malaise is unique to the mining sector, though, given the plethora of FTSE100 members who’ve opted to jump ship from London, and note TUI AG (LSE:TUI) and Flutter Entertainment (LSE:FLTR) intend do the same. Across multiple sectors, companies appear to have been struggling on the FTSE 100 for the last three years.
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Above 435p should prove useful for Glencore shares, creating a situation where movement to an initial 486p calculates as possible with our secondary, if bettered, at a longer term 578p and, according to the visuals, some almost certain hesitation, given the level of most recent highs in 2023.
Unfortunately, there’s a massive “however” and it’s shown with the Blue Circled area on the chart. The market opted to gap Glencore down in mid-January this year, triggered by the company's decision to decrease the annual dividend along with news of reduced demand from China, ensuring that a share price viewed as underperforming by analysts continued to underperform. We’ve even read one firm of analysts claiming Glencore should be trading at nearly £10.
I'm afraid, the best we can give at the moment is a third level target of 637p, if everything goes right.
- Glencore is a buy again amid dividend rumour
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Should things intend to go horribly wrong, below 400p looks dangerous, potentially triggering reversal to an initial 377p with our secondary, if broken, at a hopeful bottom of just 340p.
Unfortunately, there is also the Red Circled area of the chart to consider. If you look at it the right way and engage the correctly negative mindset, it’s potentially a Head & Shoulders formation. The arithmetic associated with such gives a pretty unpleasant answer, suggesting an eventual bottom of 215p. Due to this, we’d be quite worried should our earlier secondary target of 340p make an appearance as it would signify a lower low.
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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