Chart of the Day: Countrywide

The housing market remains the big dinner party subject of choice, with the general conclusion being that it is a market which is a “one way bet”. However, stocks related to this market, such as estate agent Countrywide, have a rather more complex technical set up.

Countrywide (LON:CWD): Above 220p Could Lead Back Towards 300p

I suppose one of the issues with regard to predictions from estate agents is that there are so many factors involved (and of course an agenda in most cases) that very often the prediction is not worth the paper it is printed on. This perhaps applies more to positive calls rather than negative ones, with the surprise today, perhaps, that we have heard from this particular estate agent that the housing market may dip over the next 18 months. The temptation is to brush this aside, although looking at the daily chart of Countrywide we are seeing base building after an extended bull run. The hope now is that the bulk of the base building has been completed, especially while the 2016 support towards 220p remains unbroken. While this is the case the upside is seen as being as high as the June price channel top at 300p. The time frame on such a move is regarded as being the next 1-2 months. Only cautious traders would wait on a clearance of the 50 day moving average at 259p before taking the plunge on the upside – as a momentum trigger.