In the aftermath of the shock Brexit vote, it’s clear that investors looking for bargains on the stock market, have seen both gifts and poison chalices. In the case of Primark owner AB Foods, it appears we have been treated to something of a steal at the lower levels.
AB Foods (ABF): Above 2,500p Targets As High As 3,300p
The headline: AB Foods shares have had their best day in 10 years, something which is quite an achievement for a company, which given the nature of the fundamentals on both the food side and even Primark side of the business, is difficult to do. No doubt part of the explanation is that in the wake of Brexit, a lot of players may have been caught short of the shares. As far as the daily chart position is concerned, the stock has rebounded with a much higher low than last month’s brief markdown towards 2,000p – the big plus point being the bounce off a line of support from January at 2,500p. Provided there is no break back below this line on an end of day close basis, we could see the gap higher today lead back to the top of the descending January price channel at 3,300p over the next 1-2 months. The best way forward for traders looking to get on-board is ideally to buy into any weakness towards the floor of today’s gap to the upside at 2,618p, just below the 10 day moving average at 2,644p.