Just Eat: Island reversal targets 650p

1 mins. to read
Just Eat: Island reversal targets 650p

I take a break from my normal obsession with the minnows to look at a pet favourite on the fundamental front – website ordering specialist, Just Eat (LON:JE.).

What is evident on the fundamental front as far as Just Eat shares are concerned is that the company has created a dominant position in its particular space. Even better, as most of us are aware, once you have first mover advantage in the new economy, and are on that Bookmark, it is rather difficult to be dislodged. The usual rule is that it will take quite a lot of money to buy you out.

In terms of the latest developments at Just Eat, today’s news is that annual profits are up to £91.3m, a rise of a whopping 164%. This suggests we are very much on the front foot with relation to the bottom line, and as can be seen from the daily chart, the trend line.

The story here is that one can draw a rising trend channel from as long ago as April last year. The floor of the channel runs at the 500p level, effectively post October support. The latest gap to the upside is encouraging, not only in itself, but also on the basis that we are looking at it completing an ultra bullish island reversal formation.

All of this would suggest while there is no end of day close back below the 200 day moving average at 527p the upside here could be as great as the 2016 price channel top of 650p over the next 1-2 months.

just eat chart

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