What's in store for Renault shares after F1 fiasco?
16th December 2021 07:37
by Alistair Strang from Trends and Targets
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Analyst Alistair Strang uses last weekend's controversy at the Abu Dhabi Grand Prix to examine share price potential at engine supplier Renault.
Our weekly drive to find something interesting in Europe reveals Renault SA (EURONEXT:RNO) currently showing some potentials. We wonder how accurate they may prove to be, given Renault are on the edge of becoming a major engine supplier to Formula One, if Mercedes opt to abandon the “sport” due to the fixed world championship against the UK’s Lewis Hamilton last weekend.
Renault, who field a team called Alpine, may find themselves in a position to step in as an engine supplier, something they previously did anyway.
At present, Renault enjoys a share price which looks perfectly capable of some reversals. We did notice, in our trawl of rankings against some European shares, the company are listed as a “Strong Sell”, with the price tending to reflect such a possibility.
Presently trading at €28.6, the share need only reverse below €28 to engage some travel down to an initial €24.1. Should this level break, we can calculate a longer term secondary target by €18.1, a level just before which we’d hope for a rebound.
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We can also mention, if passing, the share price in recent weeks exhibited a classis “GaGa” movement (circled), this Gap Up followed by a Gap Down, being one of the games played historically, prior to a fairly important share price reversal. As we mentioned recently, games such as this are proving vanishingly rare this year, making it difficult to rely on what used to be a serious red flag.
Currently, Renault needs to trade above €32.3 to give hope for genuine price recovery. Achieving such a trigger calculates with the potential of forward movement to an initial €34.2 with secondary, if bettered, a more encouraging longer term €41.6.
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.
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