Is 6%-yielder Vodafone a buy now?

Vodafone (LSE:VOD)

This is a share which has, unfortunately, tended to bring disappointment over the last few years. Similar to any new model of mobile phone, share price moves promise a lot yet tend to deliver anything new. Worse, price movements prove rather rangebound over the last while.

To cut to the chase, there’s a major issue at 241p. If the share were to just close a session above such, we’d wax lyrically about the attractions of 313p, an “almost certain” growth target. If bettered, secondary feels less likely at 372p.

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Unfortunately, the share price is now exhibiting some worrying features and risks signing up to the school of “If it ain’t goin’ up, it’s goin’ down”. We’ve an immediate problem at 196p as trades below risk travel to an inconsequential 191p.

Should 191p break, an argument exists fairly strongly for a bottom at 185p where a bounce should occur. We’re rather less than comfortable proposing a bounce at 185p as the visuals confirm the share price now travelling in the land of lower lows.

Instead, it appears awaiting 170p before anticipating a bounce makes some visual sense. But even then, there are some really nasty potentials available risking any bounce proving short lived.

Despite the presence of the dashed red line on the chart, a break of 170p risks an ultimate bottom around 111p.

While easy to emotionally discount the notion of this share price retreating to the lows of 2009 again, we do have some real concerns, especially as the price was gapped up above the historical red uptrend.

And today, it was gapped down below the trend. During 2017, we whinged about GaGa movements proving reliable direction indicators. In the case of Vodafone, it is now pointing down.

Thanks for all the emails asking about this. We’re not entirely happy at the lack of positive calculations.

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. 

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