Where next for relisted Eddie Stobart shares?

Our chartist examines the tea leaves to find a catalyst for the bombed-out logistics company.

4th March 2020 08:43

Our chartist examines the tea leaves to find a catalyst for the bombed-out logistics company.

Eddie Stobart (LSE:ESL)

We try and limit ourselves to one day a week, when it comes to email requests. Thankfully, recently relisted Eddie Stobart Logistics (LSE:ESL) feature strongly in requests this week, making the choice easy.

Absolute bottom against this share calculates down at 2p, this being the level we cannot calculate below. In fact, some concern will be justified with anything now below 6.8p as this shall be regarded as early warning for a further decline.

Thankfully, it’s easier to be slightly optimistic against the share as there’s a chance last weeks 4.5p following relisting will be deemed “close enough” to bottom to justify a proper bounce.

Presently, the share price needs to trade above 15p to calculate with an initial recovery target of 22p. If exceeded, our secondary ambition works out at 27p.

Unfortunately, neither target comes close to covering the gap from 71p, nor troubling the long-term blue downtrend.

However, it will be worth watching if the market finds any reason to exceed 27p in the weeks and months ahead.

To be blunt, any such movement will tend to suggest the drop was overcooked, giving considerable hope the market intends to force the price upward again.

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.

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.

Get more news and expert articles direct to your inbox