Will TalkTalk shares hit this chartist's target?

The company has seen strong profits from lockdown, so our chartist assesses its future potential.

TalkTalk Telecom (LSE:TALK) 

A few emails asking about the potential future for the share price of TalkTalk Telecom (LSE:TALK) gave a reason to visit the company website. 

We'd expected to find lots of information about the new 5G mobile transmission standard, widely anticipated to be the next "cash cow" for the industry.

Instead, we find a company who mentions mobiles in passing, instead focusing on their future aims to be at the heart of 'Britain's Full Fibre' future.

It appears TalkTalk intend to focus on providing fixed connectivity to consumers. We needed to scroll quite far down the page until a mention of their partnership with 02 appeared. 

The immediate share price prospects for TalkTalk looks a bit dodgy. Weakness next below 83p risks reversal to an initial 78p with secondary, when broken, at a bottom (hopefully) down at 70p.

Despite our secondary target visually challenging the Covid-19 low, the 70p level is marginally above this price and thus should present itself as capable of a bounce.

Our ultimate bottom on TalkTalk, the point at which we cannot calculate below, calculates at 39p and presently there are no indications this price level should be troubled.

A perfectly defined downtrend since 2015 gives some vague hope for the future as it signals TalkTalk's share price need only exceed 100p to finally escape, suggesting the potential of recovery to a useless initial 106p.

If exceeded, secondary works out at 120p and a point where the visuals demand some hesitation. Only with closure above 120p dare we suggest real optimism as a future 188 becomes very possible.

We're a little sceptical regarding this and, surprisingly, it's to do with the 'Telecom' part of TalkTalk's name.

The advent of 5G looks capable of bringing mobile speeds, when tethered to a laptop, tablet, or PC, which match fibre optic broadband speeds.

Experiencing these speeds without the need for fixed connectivity makes us wonder about the wisdom of TalkTalk's future plans. As a result, some research is advised.

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.