Convatec: 340p price channel target

There is not too much historical data to go by on the daily chart of Convatec (LON:CTEC), but enough for early bird chartists to make a decent call on a possible extended rally.

There are very few stocks that I have not heard of, with the usual explanation being that they are either new to the market, or after a somewhat dodgy period the company in question has decided to change its name. In the case of Convatec we are looking not only at the former scenario, but also at a company which has a rather large market cap of £1.5bn in the wake of its autumn IPO.


That said, we are not necessarily dealing with a business model focused on glamour. The main description of this company is that it is a colostomy bag maker. At least this is offset slightly by recent newsflow regarding the insulin pump manufacturing part of its business.

But from a technical analyst’s perspective we have the opportunity here to call the shares higher within a rising trend channel which can be drawn in from as long ago as November. The top of the channel is heading as high as 340p, a destination which could be hit as soon as the next 3-4 months. It is valid while there is no end of day close below the 50 day moving average at 248p. In the meantime any dips towards the 50 day moving average are regarded as buying opportunities.