Interactive Investor

Tesco: A Christmas miracle or 20-year low?

4th December 2018 09:43

Alistair Strang from Trends and Targets

Tesco has a large fan club in the City, but the share price is down a quarter since August. Technical analyst Alistair Strang tells us where he thinks it will end up.

Tesco #Gold #Nasdaq 

It's the time of the year when some people think of turkey. Whereas we review turkey potentials and #Tesco currently take the honours. The share price has several problems making themselves known so we fear the worst.

The important number at present is 197.485p, this being the current level of ‘red' on the chart, the uptrend since June 2016. By close on 3 December at 197.45p, the price entered a troubling zone despite some near-term growth looking probable.

During 2018, Tesco enacted a Gap Up, then a Gap Down. While both price movements are a considerable time apart, these GaGa things tend be worth paying attention to. In the case of Tesco, the two movements gave the price sufficient power to hit 130p eventually!

We'd normally treat this sort of threat with distain, especially as a potential bottom at a price level last seen 20 years ago, isn't visually sensible. Unfortunately, we can even calculate below 130p. Ultimate bottom for this share price is at 77p.

Perhaps this is rather a lot of misery to pile on, especially as the price only broke the trend by 3.5 hundredths of a penny. For now, though, it seems sane to suggest traffic near term below 197p can hope for a bounce at 164p. Ideally the 164p level shall not break.

If the price intends a miracle (or more probable, the market notices what just happened), it need only trade above 205p as moves to an initial 215p should make sense. Secondary, if bettered, comes along at 243p.

We suspect, until the current Brexit nonsense is clarified, Tesco shall indeed experience a Xmas miracle. Only with closure above 243p dare we abandon our thoughts of future drops.

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. 

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.