Woodford Patient Capital Trust: Where's bottom going to be?

by Alistair Strang from Trends and Targets |

After taking a beating, this analyst explains where he thinks Neil Woodford's trust can stage a rebound.

Woodford Patient Capital Trust (LSE:WPCT) 

In a welcome respite from Brexit nonsense, we've noticed Google News Business section has been dominated with a new subject. Hedge fund guru, Neil Woodford, has a vehicle traded on the FTSE 250 with the price recently getting a little bit of a hammering. It has provoked emails!
 
To be honest, we'd never heard of the bloke until he became famous for all the wrong reasons but, despite receiving emails regarding Woodford Patient Capital Trust (LSE:WPCT), we'd probably be covering it anyway.

The share price is doing something almost interesting. From our perspective, the issue is fairly simple; where's bottom going to be?

The answer, thankfully, is equally simple, but what really interests us are two distinctly different calculations.

Whether we employ Big Picture arguments or near term, we're calculating a bottom price anytime soon. (Bottom, obviously not ever guaranteed, is the level at which we'd hope for a substantial rebound)

In the case of Woodford, it appears continued weakness below 58p faces reversal to an initial 55p with secondary, if broken, at 52.6p. The proximity of each number tends give hope the price to stop falling.

We cannot calculate below these levels with any degree of accuracy - or hope.

Working on the hope the market intends to designate bottom in the 50's, how high could it be expected to bounce? At this point, we've got to abandon our software to a certain extent and simply review the visuals.

Any initial bounce would make sense to attempt an initial 75p, essentially making a challenge of the manipulation gap in the company share price.

Our secondary, if such a level is bettered, comes along at a doubtful 86p, challenging the downtrend since 2017.

Finally, to inject common sense into the discussion, please remember we cannot calculate a target below 52.6p.

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. 

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, and 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.

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