Here’s what’s next for this income stock

Card Factory – again (LSE:CARD)

When we gave Card Factory (CARD) as one of our ISA shares for 2017 the share price has performed in a fashion which makes the UK Brexit bloke seem sensible. It went up, it met our targets, it collapsed. But thankfully, with nothing close to our expectations.

Perhaps the Xmas card nonsense shall provide a saviour for the price that has not yet come close to our current drop expectations at an initial 250p, with secondary, if broken, at a longer term 213p and hopefully a proper bounce.

In fact, to escape the immediate rate of descent, the price only requires to better blue on the chart – currently 283p – as this should permit some recovery toward 295p. If such ambition is bettered, our secondary calculates at 305p, but it may actually prove to be 335p, thanks to the circled manipulation gap on the chart fouling our numbers up.

Our policy of giving primary and secondary targets is designed to give a fairly simple method of viewing price shuffled. Any initial target represents a number where, even if bettered, some reversal is probable.

In theory, this gives an active trader the chance to take some profit, wait to see what happens, and re-enter the trade next time the prior level is beaten as the secondary should make its presence known in the longer term.

But, against shares like this, where we’ve shown a manipulation circle, it can be worth engaging the brain due to the salient detail of our 335 number being higher than the prior high, more than likely to indicate at least an attempt at the circle coming.

There’s another facet worth remembering – the circle designates one of our gaga things, a gap up gap down which always tend(ed) to present themselves as a coming trauma indicator during earlier 2017.

The fact the price has not actually achieved our grotty 250p perhaps indicates residual strength, along with the gaga manipulation now being exhausted.

 

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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