Trainline shares might bounce when they hit this level
26th January 2022 07:36
by Alistair Strang from Trends and Targets
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There have been plenty of false dawns at Trainline since the Covid crash. Independent analyst Alistair Strang identifies a price at which the share 'must rebound'.
Some Trainline Share Price thoughts
Like everyone, we’re keeping a weather eye on shares which should recover, once pandemic damage recedes. Obviously, aviation, holidays, and public travel must be thought of as useful potentials and it’d be true to say many are showing early signs of ‘something’, hopefully recovering from a bottom but miles away from their pre-pandemic level.
Trainline (LSE:TRN), on the other hand’ still appears to be researching where the price shall actually stop travelling down!
The company low in the pandemic month of March 2020 was a closing price of 202p. Currently around 223p, the share is at its lowest since the initial pandemic crash. This inability to find a bottom is obviously an issue, perhaps a reflection of diminished numbers of commuters, perhaps a reflection of the UK’s predatory train ticket pricing.
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A glance at Google News failed to uncover any immediately obvious reasons for the share price decline, so perhaps this shall be worth some deeper research from anyone trying to buy a “cheap” share.
The share price is currently at a level where it “might” bounce, but we’re not entirely sold on the idea. Instead, there’s a reasonable chance near-term movement below 214p may reach 199p and, hopefully, this drop ambition shall prove sufficient to declare itself as a bottom.
The big picture is rather less comfortable thanks to a seriously unpleasant detail. When the price broke below Red on the chart, it entered an Big Picture arena where we can calculate an ultimate bottom of -34p. Obviously such a number is impossible but, unfortunately, its existence tends give our software hysterics as recovery from near-term drop targets will often prove less than enthusiastic.
Source: Trends and Targets. Past performance is not a guide to future performance
Our inclination is to simply hope 199p provides a buffer opportunity for Trainline as weakness below calculates with an initial 164p, with secondary at 113p, a level from which it almost must rebound. For this reason alone, it’s perhaps worth keeping an eye on.
Presently, Trainline requires to exceed Blue (273p at time of writing) before any recovery dare be taken seriously. A movement such as this takes the price into an area where an initial 311p is expected with secondary, if bettered, a longer term visit to 344p and some pretty confident looking hesitation.
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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