Chart of the Day: Purplebricks

I am not sure whether the two Purplebricks “experts” on the home page of its website necessarily sell the concept or the company to me, but it is probably the case that in a buoyant housing market this does not really matter. What may matter more is whether the share price rebounds from the present support zone towards 120p.

Purplebricks (PURP): 200p Technical Target

To my mind, Brexit or no Brexit, it is the case that almost any company with exposure to the UK housing market should be either flourishing or better in the present economic climate. This is hopefully what we are seeing and will see for Purplebrbricks as the shares attempt to resume the recovery seen since the beginning of the year from below 70p. The position now is that we are being treated to a decent consolidation between the 50 day moving average and also the post-June support and below 120p. The implication is that a new leg to the upside could be seen in the wake of as little as an end of day close above the May resistance line at 140p, above which the shares should continue to deliver on their post-January rally. At present the price action is contained within a rising trend channel from the beginning of the year, with the support line of the channel at 128p. All of this suggests that provided there is no weekly close back below the post-June support zone of 120p, we could be treated to further significant upside. Just how high this could stretch is suggested by the 2016 resistance line projection as high as 200p. The time frame on such a move could be as soon as the next 2-3 months.