Rocked by the tech sell-off in 2022, Scottish Mortgage shares have almost halved since last November's peak. Independent analyst Alistair Strang studies the charts to see if there's hope for shell-shocked shareholders.
The name successfully conceals an organisation which has, since 1909, been trading internationally with some considerable success. It was all the fault of Henry Ford and his everyman car, the Model T. Rubber plantations in Asia needed money to expand fast due to the burgeoning demand for car tyres, and the original incarnation of the company stepped forward.
A few years later, their name changed to Scottish Mortgage Ord (LSE:SMT). The company expanded its interests, which now includes equity markets worldwide.
From an immediate share price perspective, there’s quite a lot pointing toward optimism. But unfortunately, the price need only tumble below 800p to risk triggering reversal to 740p next. Visually, such an ambition isn’t terrible, essentially matching the level of the Blue trend break at the start of July.
Normally, we’d anticipate a bounce should such a reversal occur, especially as things become dangerous in the event 740p breaks, as “bottom” calculates at 619p, a price level from which it’s difficult to visualise any quick recovery.
Past performance is not a guide to future performance.
However, the share price “only” needs to exceed the recent high of 884p to enter the realms of hope, calculating with an initial recovery potential to 978p with secondary, if exceeded, a more encouraging target at 1,164p.
Our inclination is to suspect Scottish Mortgage investment trust's share price intends recovery in the months ahead as the market made a very deliberate movement to break through the immediate Blue downtrend. Fingers crossed time!
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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