Ibstock: Government schemes build to 200p target

It is rare that as a technical analyst the cue for looking at a stock is quite so directly fundamentals based, but, in the case of Ibstock, the latest Government initiatives on the housing front make it an appropriate thing to do.

Ibstock (IBST): Above 50 Day Line Targets 200p

Apparently in the world of bricks it is Ibstock which is king in the UK. So much so, the company is actually dominating the 2016 Brick Awards. This is presumably the Oscars of the industry….

As far as the cue to discuss the largest brick maker in the land we have heard the Government is planning a £5bn initiative to get the number of new builds number higher. This is in the wake of the criticism that the big housebuilders allegedly have a rather nasty habit of going slow in this area, and of course are not necessarily aligned in terms of easing the housing shortage. As far as the charting position of Ibstock shares is concerned, currently it can be seen how there has been a gap down for the shares at the beginning of September, but since then we have seen a consolidation along the 50 day moving average level of 164p – also the floor of a rising trend channel which can be drawn from the end of June. The top of the channel is pointing as high as the 200p zone, equal with former late June resistance. The timeframe on the upside scenario is the next 1-2 months, while there is no break back below the 50 day line.