Taylor Wimpey shares and the path to 414p

These shares have come a long way since the depths of the global financial crisis in 2008-09, but are also far from their recent best. Independent analyst Alistair Strang uses his software to plot a path higher.

Since 2008, Taylor Wimpey (LSE:TW.) has done nothing particularly useful. Okay, we’ll concede their share price hit 4.28p during the financial crisis, boosting to 240p in the period since.

The problem with Taylor Wimpey is fairly straightforward.

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Their share price needs to exceed 263p to convince us it has made a successful transit from the damage caused by the last major crash, entering a cycle where proper recovery is probable for the longer term.

This is a share which topped out at 542p in 2007, is currently trading around 115p, and has essentially struggled during the last 15 years. So, we’re effectively consigned to looking for any scenario which may boost their share above the 263p level!

How hard can it be as the ruling downtrend is only around 163.741p currently?

The immediate situation demands trades above 125p to trigger share price recovery to an initial 151p and some possible hesitation. Should this level be exceeded, things become a tad more interesting for the longer term, our secondary calculating at 174p and the chance for the builder's share price to close above Blue on the chart, laying foundations for future growth in the direction of 226p, maybe even beyond. And there you have it.

All Taylor Wimpey needs to enter a track to an eventual 414p is go up by 10p from current. If only life were so simple. This outpouring of optimism comes with a few inevitable pratt-falls. Glancing at the chart, the visuals imply a strong suggestion of some stutters at the 174p level, the reason being fairly obvious.

Source: Trends and Targets. Past performance is not a guide to future performance.

During 2021, the share price struggled to exceed such a point and there are doubtless a bunch of folk who “invested” at these highs, just begging to get their cash back. Invariably, this will create selling pressure, introducing a hesitation in growth. But the smarter traders will notice this time, it has achieved such a price level while trading above the ruling downtrend, resting on the optimistic side of the Blue line.

Similarly, the high of 2020 shall doubtless introduce a stutter should the 226p target appear and, once again, all our usual reasons for hesitation apply.

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But in this instance, due to “the risk” of substantial growth beyond 226p, closure above this price level invents a seriously good reason to view Taylor Wimpey as a reasonable long-term hold.

Hopefully nothing such as a banking crisis provides sufficient excuse for this share price to close a session below 84p. Such an event risks triggering reversal to an ultimate bottom of 22p, doubtless an ideal level to open a Long position and hope for the best!