A telecoms buy for the contrarian investor?

Telecom Plus (LSE:TEP)

As with many shares currently, there’s something a bit funny going on with this lot’s share price. Perhaps news relating to Dixons Carphone (DC.) is tending to add depression or perhaps it’s simply the monsoon rain forcing misery to take hold. But…

It appears continued weakness below just 1,024p should drive Telecom Plus' (TEP) share price back to 958p. The proximity of a red line – the uptrend since 2010 – tends to suggest some sort of bounce should occur, should 958p make a guest appearance.

The bigger problem will occur should the price be permitted to close a session below 958p as some real trouble will make itself known.

  • Is Telecom Plus collapse an opportunity?

Essentially, to cut through the static, closure below red enters a region where reversal to 517p becomes very probable. Secondary, if broken, calculates at an “ultimate” bottom of 404p, the point below we are not comfortable projecting. For now though, it appears 958p shall prove capable of provoking some sort of bounce.

For the future, any bounce capable of bettering just 1,240p should prove quite interesting, given our initial longer term target calculates at 1,713p. If exceeded, our secondary comes along at just 1,775p which tends to suggest we should anticipate stutters in the 1,700p range, if the given scenario ever bears fruit.

However, for the immediate future, we suspect 958p should prove of some use, if wanting to catch some sort of bounce in the 5-10% range.

Source: interactive investor             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, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation, and is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company’s or index name highlighted in the article.

Source.