Worse to come at Woodford stock Purplebricks?

As Neil Woodford reacts late to the share price plunge and trims his stake, how low might the shares go?

Purplebricks (LSE:PURP)

A colour made fashionable by a dead pop star provides sufficient reason for distrust with online estate agent Purplebricks (LSE:PURP).

Prince, with sufficient clout to do his own thing, often proved the axiom, "just because you can, doesn't mean you should." 

And something has gone terribly wrong with Purplebricks' share price, with the result extreme caution is now required, if it somehow manages close below 91p.

Unfortunately, this looks likely as weakness now below 110p indicates coming travel to an initial 78p, almost matching the share price low just after the initial launch.

From our perspective, this shall prove an extremely dangerous situation,as below 78p and we can calculate an initial 44p with secondary, if (when) broken at an ultimate bottom of 31p.

This ultimate bottom certainly presents a level where our rules will suggest, rather firmly, the share price will bounce with some integrity. As to whether it ever attempts its historical highs above 5 quid in the future looks unlikely, unless some miracle occurs.

At present, Purplebricks requires to exceed 137p just to exceed the immediate downtrend and enter a cycle where our initial calculation suggests 148p with secondary, if bettered, a donk against 186p and the historical uptrend.

We're not impressed with performance but if the share indeed ever manages to visit the 30's, if should prove worth keeping an eye on.

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.