While no-one has actually asked about Boohoo (BOO) nor Ryanair (RYA), we’ve been wanting to comment. If only due to utter dislike of Ryanair as a people carrier (due to travel experience) and Boohoo as having a silly name!
There’s also a fascination about Ryanair’s seeming attempts to drive its own share price down with ongoing PR incompetence! We also take our regular Friday look at the FTSE 100 (UKX).
FTSE 100 for Friday (FTSE:UKX)
Our FTSE Friday thing remains, by some margin, the best-read analysis of the week. As can be assumed, this places rather a lot of pressure due to an expectation we’ll get “it” right (again).
We’ve some hopes the market is about to enter an uptrend, simply due to the large number of shares which appear to be regaining their prior uptrend despite painting strong pictures of gloom during September.
What surprises us this year is September usually finishes pretty poorly with October abruptly giving strong upward hope for the end of the year. In fact, the rubbish written about “Santa Rally” possibilities ignores the fact that any rally usually commences at the start of the final quarter.
However, as mentioned, it feels probable we’re about to experience a decent Friday.
Should the FTSE (the index during trading hours) now better 7328 points it should experience near-term growth to an initial 7,349 points. If triggered, the stop can be at a reasonable 7,288 points. Better still, our secondary upward target is placed at 7,419 points.
Given the FTSE closed Thursday at 7,319 points and most of September has been pretty boring, we’re less than confident at seeing a 100-point rise in a single day!
What happens if 7,288 breaks?
In honesty, panic from our perspective as the index would once again enter a cycle down to 7,025 points. Near term, if below 7,288 then 7,250 appears the initial target with secondary, if broken, at 7,222 points.
If triggered, the stop can be at 7,320 points, but we’d warn against taking any drop seriously if it occurs during the opening seconds of the trading day. Too often this is a trap.
All kidding aside, if someone were to write a manual on “how not to do it”, surely Ryanair will make valuable contributions as it certainly feels like the market is starting to lose some fascination with its share price.
As the chart shows, the share has experienced incredible ascent since 2011, increasing nearly sevenfold. This has created a fairly solid looking uptrend, currently at €9.6. The near uptrend, represented by a dashed red line on the chart, is currently around €13.45.
If Ryanair continues its PR blitz, the situation now appears to be weakness below €15.85 driving the price down to €15.02 next. While some sort of bounce at this level is expected, if €15.02 breaks we’d expect a real bounce in the future at €13.85.
Such a target level also implies a collision with the near uptrend, along with a bounce simply due to hitting the level of prior lows. In price movement terms, €13.85 therefore represents a “perfect storm” if looking for an entry point to catch some sort of rebound.
Alas, we’d be guessing to a degree if speculating on where such a bounce would go but experience hints the €16 level will make a lot of sense.
Finally, if Ryanair succeeds beyond its wildest dreams and forces the price below €13.85, we’d be inclined to panic as an attempt at the solid red uptrend looks extremely probable sometime in the future!
We should really have commented on this at the initial drop as it became obvious – to us – the price intended 185p as an initial target. Secondary, when such a level breaks, is a longer term 167p.
Currently the share price requires to better 219p just to regain the prior uptrend as this should produce an initial 228p, along with turning our drop predictions to mush.
However, the visuals are not encouraging as the market now has gapped the share below the prior uptrend and generally this indicates a cunning plan is in place.
In summary, our suspicion is this shall end up bouncing from 168p to eventually produce a new trend as we’d tend to expect anything near term from 185p to bonk against the red line prior to withering again.
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.
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