Interactive Investor

Prudential shares and the case for a recovery

This FTSE 100 stock has been faithfully tracking a trendline. Next time it exceeds the downtrend there’s a heightened chance of an upward spike, believes independent analyst Alistair Strang.

14th November 2023 07:30

Alistair Strang from Trends and Targets

    Sometimes a share price can perform in surprising ways and, over the years, we’ve learned to pay attention to some specific movements. At present, Prudential (LSE:PRU) is exhibiting one of these dance movements which perhaps shall become an early warning signal for some movement of strength.  

    In this instance, we’ve drawn a circle on the chart where the share price appears to be reacting to the downtrend for 2023 and, visually, there seems to be no reason for this.

    When this phenomena occurs, it costs nothing to keep an eye on the share price, especially as next time it exceeds the downtrend there’s a heightened chance of an upward spike and usually it’s one which shall stick.

    In the case of Prudential, exceeding Blue, at 925.91 presently, will serve to introduce the potential of gains to an initial 1,004p with our longer-term secondary, if exceeded, calculating at a future 1,189p.

    Obviously, we are being a touch cautious here as just because the share price is following the downtrend from afar, there’s no certainty it will indeed shoot higher. But then again, this is the stock market, a field where the word “certainty” should be banned, perhaps replaced with “balance of probabilities!”

    Overall, should Prudential's share price successfully manage to close a session above Blue, we can calculate a long term attraction as coming from 1,499p.

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

    Our alternate scenario for Prudential questions the drop potentials, if the share price were to discover an excuse to break below Red on the chart. Currently this level is around 817p and movement below such a point risks triggering reversals to an initial 697p with our secondary, if such a level breaks, working out at a silly looking future 465p.

    Our inclination, for now, is to lean on the side of optimism.

    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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