Are Inchcape shares driving for success?
Sitting near the middle of their trading range of the past four years, independent analyst Alistair Strang looks at potential for gains at this mid-cap car dealer.
21st January 2025 07:33
by Alistair Strang from Trends and Targets
Inchcape (LSE:INCH)'s share price is, according to the charty fans, supposed to be on the verge of sharp reductions, potentially to an eventual bottom around 612p.
The automotive distributor's share, quite successfully, achieved our gain targets, even exceeding our secondary target of 813p for a while in 2024, but “poised for failure” now appears to be an easy conclusion.
- Invest with ii: Open a Stocks & Shares ISA | ISA Investment Ideas | Transfer a Stocks & Shares ISA
From a visual perspective, we’re now supposed to believe reversals below 735p threatens a drop to an initial 679p with our secondary, if broken, at an eventual 612p and hopefully a rebound.
But we have our doubts, which are growing due to share price behaviour during the last few days. The chart inset below shows something candles don’t reveal as despite intraday movements, the price has remained above the Red uptrend.
That creates a situation where we suspect the market doesn’t want Inchcape to drop, yet will be quite happy if traders fall for a “fake” play. When a share price breaks below an uptrend, yet “walks” up the trend in the period thereafter, it'ss generally a pretty reliable signal for continued gains.
Inchcape is living in interesting times.
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 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.