Imagination Tech: Above 100p could stretch towards 150p

The latest news regarding Imagination Technologies (LON:IMG) really has been something of a shocker, with the company taking quite a hit from Apple’s decision to walk.

Although it has to be admitted Imagination Technologies seems to have the air of a binary bet in the wake of Apple – its main customer heading for the hills – it would appear that private investors regard this situation as a genuine bottom-fishing opportunity. While this may prove to be the case, the ride here is likely to be far bumpier than the bottom-fishers may be hoping for.


Indeed, this situation is even one where fans of this space, such as myself, may have decided long ago that there were too many question marks. Perhaps the most obvious issue is the real motivation of Apple’s pulling the plug on Imagination. If the chip designer is behind the technological curve, then the latest rebound could merely be a dead cat bounce.

Indeed, as is often the case in the biggest stock market conundrums, it can be the technicals which provide the best parameters for investors. This is said in the wake of this week’s bear trap rebound from below the former 2016 intraday low at 101p. At least while there is no end of day close back below the former one-year floor, a rebound back to support on the way down in the 150p region last year could be seen over the next 1-2 months.