Can this Woodford Income share bounce back?

It used to be the case, when you turned 50, Saga (SAGA) bombarded you with mail. Nowadays – in Scotland anyway – when you turn 50 you are sent a bowel cancer test kit. Eventually, Mrs T&T became the victim of a practical joke £100 fine c/o the Scottish NHS due to her tardiness in returning the sample.

The funny thing is, while the Scottish Government noticed her age, she didn’t receive the usual plethora of junk mail trash for funeral plans, cruising with coffins, cheaper car insurance, and similar recycle bin fodder.

Is something going on with the “Over 50’s” market place?

Saga’s share price certainly appears to claim this is the case as something went horribly wrong in December last year. Thankfully, as the chart shows, there had been ample warning a few days previously when it broke through the uptrend since 2015 and promptly achieved a lower low than the prior 2017 dip.

Finally, it indulged in a bonk against the prior trend before falling back, a pretty clear signal investors were about to send their money on a Saga Holiday!

Currently trading around 117p, the share price need only slip below 115p to point at the potential of coming weakness toward an initial 97p. Secondary, if broken, comes along at 67p – the ultimate bottom below which we cannot currently calculate.

To escape this living death sentence, the share price requires better than just 125p as this should prove capable of useless recovery to an initial 135p. If bettered, we shall assume bottom is “in” and plan for a longer term 148p which, if exceeded, requires an entirely new look at the shares potentials.

Unfortunately, for now it seems 97p – and fingers crossed for a decent bounce – will prove some sort of strategy. But if 97p gives, a trip down to 67p looks graven in headstone.

 

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. 

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. 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.

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