#FTSE #CAC40 We’ve expressed concern for the FTSE, due to a logical expectation of many companies issuing Profit Warnings, due to the disaster which was 2020. #Greggs Bakers stepped into the spotlight, announcing record losses, indeed their first loss since listing in 1984, and of course, their share price increased by 8% on a day when the FTSE was defying gravity! We fear their optimistic outlook for recovery may prove as fluid as UK Govt lockdown statements.
The company expectation of a return to profit in 2022 doesn’t resonate well, especially thanks to growing fears it shall be autumn 2021 before the UK returns whatever the new normal will be. Quite how this will effect the deserted canyons of the city, due to people working from home and ‘enjoying’ online shopping while ensuring they are nowhere near a convenient Greggs outlet. The company statement; “history shows city centres as the driving force of any economy and so they will come back even if it is at a lower level” tends ring hollow as no-one knows what a life post-Covid shall really be like.
For now, we’re going to adhere to our suspicion of future severe market reversal, when a drip of negative reports becomes a flood.
As for Greggs share price, trading around 1920p at time of writing, it needs above 2052p to give assurance movement on the current cycle should prove viable. Exceeding such a level looks capable of triggering recovery toward an initial 2248p with secondary, if exceeded, calculating at 2567p. The secondary ambition is visually interesting, suggesting a future attempt to match the series of historical highs attained in the last few years. We will have strong reason to anticipate hesitation, should such a lofty ambition occur.
For everything to go pastie shaped, the price needs fall below 1700p, this risking a pretty messy chain of events which should bottom around 943p.
One interesting aspect, hitherto unknown, comes from the spelling of the word “Pastie”. Google insists it be spelt “Pasty”, the definition of “Pastie” is for coverings for the female nipple, traditionally worn by striptease artists!
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