Are Wetherspoons shares worth drinking to?
Running a pub isn't easy; running hundreds of them is even harder. Independent analyst Alistair Strang looks at his charts for signs that this share price can find its way higher.
7th November 2024 06:56
It looks like we’re crawling toward an interesting end to the week. Equity markets, already reacting positively to Mr Trump’s victory in the USA, now will hopefully be able to frame a response to a cut in interest rates from both the UK and the America.
Popular theory suggests markets sometimes price in these forces due to them being leaked well in advance, but in the case of the FTSE 100, even by UK standards the index is toddling off in an entirely wrong direction to suggest anything positive may be happening.
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Wetherspoon (J D) (LSE:JDW) has been in the news recently, warning of the damage a near £60 million jump in taxes and costs will do to their business following the UK Budget. The Bank of England shall surely need to accelerate the pace of rate cuts to mitigate the damage being done to businesses. In other words, a visit to your local Wetherspoon is going to be more expensive but, on the bright side, you may almost be able to afford your mortgage.
For us to take any recovery in their share price as real, Wetherspoon needs to exceed 712p to tick the first box of hope, calculating with the potential of an initial 778p with our secondary, if beaten, at a longer-term 811p. This is quite a big deal, due to closure above 811p potentially triggering a Big Picture movement to 1,140p and a need for us to revisit the numbers.
However, that’s about the end of the good news as the share price is in an extremely fraught position, where weakness below 595p threatens travel down to an initial 509p with our secondary, if broken, at 459p and a potential bottom level. Visually, this is currently quite an unhappy share price, but then again, who’d run a pub?
Source: Trends and Targets. 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 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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