Here's how dividend stock Persimmon can stop the rot
14th September 2022 07:19
by Alistair Strang from Trends and Targets
Its shares have more than halved since April 2021, and there are certainly difficulties ahead, so independent analyst Alistair Strang has gone hunting for possible positive catalysts.
Persimmon's (LSE:PSN) share price is currently behaving as if someone has blocked their view of direction as it seems to want to go down.
When the 'pandemic drop' happened in 2020, Persimmon's share price closed at 1,534p despite reaching 1,367p with intraday hysterics. This has created the awkward situation where the share price is currently giving a "lower low" in terms of closing price but not a "lower low" in terms of intraday range.
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Unfortunately, plenty of unpleasant experience has taught us that closing prices tend to provide a safer indicator for market direction, so we're inclined to anticipate the worst for Persimmon.
Movement now below 1,398p (the most recent intraday low) calculates with the potential of ongoing reversal to an initial 1,259p, visually alarming but hopefully capable of a bounce.
The bigger problem occurs should such a level break, as our secondary target works out at 799p, a price level where a solid rebound almost must happen. Should it ever appear.Â
Thankfully, the share price doesn't need to try terribly hard to extract itself from this trench it's digging, needing above 1,670p to ideally trigger near-term recovery to 1,777p with secondary, if bettered, at 1,901p and almost certain hesitation, due to historical movements.
Above 1,901p and we shall need take another look at the tea leaves.
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.Â
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