Superdry #Brent # Following Superdry’ somewhat funny shareholders meeting, we’d prepared a detailed analysis of the company potentials. But something (experience?) made us delay for a day, just to see what happened next as there was a single alarm bell making us doubt our optimistic stance. [Warning; teacher mode follows]
When a downtrend is as neatly defined as SDRY’s, a trend break which fails to perform flamboyantly is always a worry. Worse, and perhaps more importantly, if the share price closes below the point of trend break, we’ve learned caution is often a worthwhile stance.
SDRY broke the trend at 541p back on March 25th.
It failed to gain any real upward momentum, instead closing the session of April 2nd at 500p. Despite the BLUE trend line being at 499.375 and thus, the share remaining in positive territory, it was now substantially below the point of trend break. As a result, we dared not trust it.
Price moves on the 3rd April tended justify our caution and instead of an article devoted entirely to future positives, the share deserved something which reviewed both sides of the argument. Which is a pity, ‘cos seeing a BoD resign en-masse at the prospect of the company founder returning with the intention of saving the company was quite refreshing.
The situation now is slightly alarming. Weakness continuing below 433 looks capable of reaching 386p, hopefully able to generate a bounce at such a level. If broken, we can calculate bottom at 265p eventually.
The share price needs a miracle above 576p before anyone dare relax for the longer term, this level apparently being a trigger for recovery to an initial 750p with secondary, if beaten, a longer term 1079p.
For now, while a bounce at 386 looks pretty possible, we have a sneaking suspicion the price shall eventually bottom down at 265p. Perhaps it’s one worth keeping an eye on for the longer term.
