Taylor Wimpey: an obvious opportunity?
A lot has been written about the UK housing sector, its recovery potential and the headwinds it faces. Independent analyst Alistair Strang reveals what his charts say about possible outcomes.
23rd January 2025 07:13
by Alistair Strang from Trends and Targets
Every now and then, a share price does something stupid which bodes well for the future! While this entire statement is quite contradictory, we’ve often seen this type of share price dance which can present a pretty solid hope for the future. Our silly sounding argument relates to Taylor Wimpey (LSE:TW.) and the Blue downtrend since 2007 and how the share has behaved in relation, almost as if the downtrend actually matters?
Obviously, if we paint a downtrend and pay attention to price movements, by 2 January this year the market confirmed this 18-year-old line is actually important – to the market.
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From our perspective this is quite a good thing. While the share price bettered the trend in 2024, even achieving a high of 169p, the market has opted to force the share price below Blue in quite an orderly manner, which shall presumably panic private investors.
From a near-term perspective they are correct, but by confirming our roughly painted Blue line is important, the market has created a drop-dead obvious opportunity for the future. Our fuss about this argument comes from what invariably happens when a share price regains such a historic trend. Often, the share price shall go up, quite spectacularly, and for this reason we propose keeping an eye on Taylor Wimpey in the months ahead.
The immediate problem comes from the depth of reversals. Currently below 106p calculates with the potential of reversals to an initial 90p with our secondary, if broken, at a bottom of 83p. The problem comes, if such a scenario unfolds, because it makes our “surprise” gain scenario becomes arithmetically impossible. For now, we think TW will prove worth keeping an eye on.
Currently, share price movement above roughly 121.519p calculates as taking the share above Blue again, ideally triggering our recovery scenario with the potential of recovery to an initial 151p with our secondary, if bettered, at a game changing 175p and considerable hope for the future.
Taylor Wimpey, currently around 114o, hopefully roars this dream with such a reality bomb, working out with the potential of ongoing gains toward a 151p with our secondary, if bettered, at 376p and the need for a entire conversation about some reasonable near-term potentials.
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.
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