Pearson could be on the verge of doing something interesting, believes independent analyst Alistair Strang. Here's why.
Publishing giant Pearson (LSE:PSON), founded 178 years ago, enjoys a company history which makes for a fascinating read. Quite a few organisations within the FTSE 100 boast of a chequered history, but Pearson surely must come close to the top, if only for their formative years at the top of the construction industry. But then they learned to read, taking a new direction!
An example of their work is the existence of Mexico City. Pearson drained the swamp bowl, literally allowing the city to exist. They also appear to have specialised in tunnel works as evidenced with the railway tunnels under New York City.
There appears nothing logical about their transition into becoming one of the largest publishers in the world and now, specialise in educational areas, both with conventional textbooks along with digital learning technologies. Inevitably, there are concerns around the world of the impact Pearson has on education due to their influence through every part of the teaching and qualification process.
As rabbit holes go, it's certainly worth an hour or so to research Pearson Plc's history.
As for their share price, it feels like it's on the verge of doing something interesting and we've received a couple of emails prompting us to take a look.
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The immediate situation is mildly confusing, the share price opting to pole dance around the Blue downtrend which dates back to 2015. This trend has been pretty well defined and we're inclined to take the circled brief spike above the trend as a promise that something is in the wind.
Source: Trends and Targets. Past performance is not a guide to future performance
This year, things were looking especially hopeful in March until the overall market dampening effect of Ukrainian events took hold, creating a situation where the price is now hugging the Blue line (see insert).
However, we are inclined to allocate 806p as a potential trigger to get things moving, calculating an initial ambition at 917p with secondary, if bettered, a longer term visually sane 994p.
For everything to go pear-shaped, below 738p looks problematic, allowing a reversal cycle to an initial 630p with secondary, if broken, a hopeful bottom down at 460p.
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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