Chart of the Day: William Hill

A few weeks ago I bought a pair of glasses at Poundland (for £1, of course), but would have been better off not going to Specsavers and buying the shares as the company received a takeover approach. In the case of William Hill, taking a punt on the share price looks to be a better bet than going down to your local branch of the bookie.

William Hill (WMH): Classic Bid Rejection Situation

Having studied M&A situations for the best part of 30 years, and hence being familiar with most of the twists and turns in this area, it seemed that last week’s rejection of the Rank/888 deal fitted within the classic mould of a bid story. This was in spite of the notion that the threesome concept is admittedly a little strange. However, the idea that the bookie had to reject the rather low ball offer from its sector counterparts in order to improve and flush out other contenders seemed to be as logical as it was correct. This point is underlined by the way that the share price hit a floor on Thursday just under 300p, but just over the 50 day moving average at 292p. The idea is that while there was no end of day close back below the 50 day line this stock is still in a bull phase. This has been maintained, with the top of a June rising trend channel at 390p the one month technical target, especially if we see a quick clearance of the 200 day moving average now at 337p. Given the RSI uptrend line at the neutral 50 level from June this is expected by the end of the week.