What’s next for this hammered blue-chip?

Kingfisher (LSE:KGF)

A little known fact about Kingfishers is, when they dive into water, they close their eyes, fishing blind! Additionally, their beak design is so aerodynamic many Japanese bullet trains are modelled to copy it! However, Kingfisher (KGF) – the company – is another matter…

A little known fact about Kingfisher PLC is their uptrend since 2008 currently is lurking at roughly 296.931p.

In addition, the immediate state of affairs suggests weakness below 304p (currently trading around 308p) should bring reversal toward 296.8p, therefore running the risk of the share price closing below the long term uptrend.

To get real, common sense suggests a bounce is probably awaiting at red on the chart as we shall not risk closing our eyes and suggesting the worst unless the share actually does close below red. An event like this would be truly bad, opening the price to reversal toward 233p initially with secondary, if broken, at 130p.

Doubtless, a constant supply of negative news would be required to make such miserable sounding drop potentials a reality.

The immediate situation with KGF is the price requires above 346p just to escape the downtrend since February and indicate drop forces are easing.

Thus, if it actually does bounce from the 296p level, above 346p should bring an initial 360p with secondary 381p. Unfortunately, similar to expecting a special offer from B&Q’s website to actually be available in their stores, we’re not holding out much hope for this. Events with other shares have tended to produce 10-15% rebounds from trends only.

Perhaps it is worth watching for a near term long position with a blooming tight stop!

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.