Virgin Money: where will its shares go from here?

Our chartist examines this challenger bank and interprets the rise of the DAX index.

Virgin Money

‘Just because you can, never means you should!’ is a sentiment which Virgin Money UK (LSE:VMUK) must often feel defines their rebranding from Clydesdale & Yorkshire Bank. From a share price perspective, things failed to go well over the last few years, with the value remaining as similarly becalmed as the big three retail banks.

Thankfully, in the case of Virgin Money, the share doesn't need a huge amount of work to propel itself free of the horrible Covid-19 drop to 46p in March. Despite the price trebling since the 46p low, we can now identify a trigger level at 164p, above which Virgin Money should commence some proper longer-term recovery.

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Above 164p calculates with an immediate potential of 186p, challenging the pre-pandemic high. With closure above this level, life becomes substantially more interesting as we can argue in favour of 260p as a longer-term secondary target. Above such a point we shall need revisit the tea leaves as life should become fun again.

For trouble to rear its head, the share needs to move below 70p as ‘bottom’ is now at 20p.

The amazing DAX

The chart below shouldn't really need a commentary but we'll give it anyway. The German stock market has joined the USA, trading atall-time highsand leaving the UK primary index looking weak. To be fair, even the UK AIM market is now visually outperforming the FTSE 100, trading at levels last seen in 2007.

The burning questions, obviously, are: will the FTSE suddenly surge to catch-up with better performing markets? Or is the UK paying the price of a history of incompetent political leadership?

We can make an argument which favours the DAX heading to 16,000 points as the next major point of interest. Whereas if the same criteria were applied to the UK FTSE, we currently struggle to calculate an upper ambition above 8,000 points.

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.