Tag Archive for 'Marks'

Should you Buy Marks & Spencer Shares?

Published on February 23, 2010 in Education and Market Reviews. 0 Comments Tags: , , , .

The immediate answer is ‘No’ – not yet anyway.

M & S shares are struggling and failing to make any immediate progress. The technical analysis shows that the shares are on the verge of entering a downtrend (which means that lower prices would become almost certain). But a downtrend is not yet fully in place and thbere is considerable technical support just underneath the current price level. This support may be sufficient to push the share price back up the scale – but it is a matter of ‘may’ and, therefore, you would be well advised to stay out of M & S stock until the picture becomes clearer.

The important point about this is that if the support does not provide a base for the share price then it is odds-on that the price will fall – and it could fall rapidly once/if the support levels are broken.

Look at the chart of the daily price history over the last year -

marks - dly

You can immediately see that the price has broken below the trend line from the March’09 low. This signals weakness, as does the fact that the price never got back up to anywhere near the half-way point, at 475p, of the 2007-09 collapse – as you can see from the weekly price chart, here -

marks - wkly

Now, there are three support levels close together for the current position and, if they do their job then the price should stableise and could start to recover but – and it is a strong ‘but’ – if these levels should fail then the share price is likely to collapse. Certainly down to the 280p level and, probably, on down to the 230p area!

For those of a technical bent, the three levels are 1.  334p = the 25% retracement of the 2007-09 collapse.   2.  326p = the level of the Aug’09 and Feb’10 lows and   3.  321p = the 50% retracement level of the 2009 recovery rally.

So, an aggressive ’short-sell’ trader might go short of M & S stock now but it is safer to wait. The price to wait for is 320p. If that level is broken then the price is likely to  fall like a stone and a ’short’ trade will produce big profits. But if the 320p level should hold good and support the price it will not mean that the shares are a ‘buy’. It will need a lot more than that to create a safe and certain ‘buy’ opportunity. More of which later – or on request if you need immediate knowledge.

Is Marks & Spencers a Buy?

Published on February 16, 2010 in Education and ShareHunter News. 0 Comments Tags: , , , , .

No! Is the direct answer. Well not yet anyway.

Technical Analysis shows that the dominant trend, which has been an Uptrend, is in process of change. It has not quite yet swung into a Downtrend but is very close to doing so. If, or when, it does then M&S will not only not be a buy but will become a good ’short-sell’ prospect.

Look at the weekly chart -

M&S - wkly(Click on chart to enlarge)

Note that the price has fallen below the 30wk Moving Average. This is a first signal of an impending change in trend. The price has also fallen below the main uptrend line that has supported the price during the 2009-2010 recovery rally, another signal of change.

But there is potential support for the price in the form of the 323p level – which is the 50% retracement of the March ‘09 to January 20′10 recovery rally. This 323p level may provide support and so prevent further price falls – but that does not mean that the stock can be considered as a ‘buy’ – simply that it will not become a ’short’ trade prospect (until the 323p level is broken).

Now look at the daily price chart -

m&S - dly

The 323p level of potential support is just below the current price. A fall below this level will prove weakness in the stock price and will encourage a cross-over of the two exponential MAs which will provide confirmation of a swing into a Downtrend and, thereby, indicate the potential for (much) lower prices. Note also how the recent higher volumes have co-incided with price falls – a sure sign that selling is outweighing buying!