Zak mir on the fund management giants (and Ashmore, Schroders & Hendersons!!)

As we await a swift entry for the fund management company of Spreadbet Magazine founder Richard Jennings – Titan Investment Partners, into the FTSE 100 it seems worthwhile looking at the charting position of other leading UK companies in this area!

This idea comes in the wake of today’s pounding of shares in emerging markets asset manager Ashmore (ASHM). It is down 10% as I write on fears over tapering which it seems have caused the hot money to decide that being in the more speculative areas of the markets such as the Far East and South America is not worth the risk.

Ironically, it may be that today’s price action, which smacks of being something of a knee jerk one to me, could be something that both Ashmore’s former clients as well as those who are short of the shares may actually live to regret. Nevertheless, from a pure charting perspective, it would appear at least in the first instance that one should err on the side of caution. This is because Ashmore’s daily chart is currently sporting one of the more powerful sell signals around – the unfilled gap to the downside through the 200 day moving average. In this instance, the 200 day line is currently running at 381p and therefore today’s meltdown with the stock running at around 360p more than qualifies this situation as one for the bears to keep an eye on. In fact, it may be that the only thing missing as far as them pressing the sell button is concerned would be a break, on an end of day close basis, of a line of support from June at 353p – an event which would mean the symmetrical triangle on the daily chart since May has been decisively broken. This would then imply that the stock was due to retest the June support zone fractionally under 320p over the next 2-4 weeks. At this stage only an end of day close back above the 200 day moving average would even begin to unwind the sell scenario.

Like Ashmore, Henderson Group (HGG) also has exposure to emerging markets, and the bad news at its peer has also affected the daily chart configuration here. What is interesting as far as Henderson’s price action is concerned is the way that we have the latest unfilled gap to the downside leading to the formation of an island top reversal signal.  If you add in the way that we have the shares backing off from the top of a rising trend channel from May at 2,400p and having also exhibiting bearish RSI divergence in the RSI window between the November price highs and the higher peaks to start January then what this means is that aggressive bears would be waiting on an end of day close back below former November resistance at 224p before taking the plunge on the short side. The target in the first instance over the next 4-6 weeks is seen as being towards the floor of the 2013 price channel at 208p.

Finally among the leading fund managers, it would appear that giant Schroders (SDR) has been the least ruffled by the problems being suffered by Ashmore.  In fact, from a technical perspective, it looks as though the setup here in fact remains on the positive side despite the unfilled gap to the downside today. The reason for the relative optimism is the way that last month’s gap to the upside remains unfilled and that even on todays dip the stock avoided the 50 day moving average at 2,506p. The likelihood is therefore that while there is no end of day close back below the 50 day line a rebound back towards an August rising trend channel at 2,800p may be forthcoming over the next 6-8 weeks.

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