London Capital: Bullish falling wedge points to 8p

1 mins. to read
London Capital: Bullish falling wedge points to 8p

With over 25 years of direct experience of brokers/spreadbetting companies, the big takeaway I have is that it requires a great deal of effort to fail in this space.

London Capital Group (LCG): Increased FX volatility could lead back to 8p

Clearly the bar tends not to be set too high for broker research amongst “investment” banks and stockbrokers. Indeed, it is usually so low as to be a contrarian indicator. This was especially the case for the mining sector, and the loyalty to the banking sector even as it crashed in the aftermath of the Global Financial Crisis.

The most amusing incident of recent times came from Citigroup on September 28 less than 10 days before the Flash Crash in the (Great) British Pound on October 7. The piece de la resistance was that “Citi also lowered its average daily volume foreign exchange (FX) estimates for its FX business EBS, which account for 50% of NEX’s earnings.” But to be fair, “Citi added that it acknowledges US elections in November and a possible US rate hike in December will be catalysts for heightened FX volatility.”

Indeed, the rise in FX volatility and for indices as well over recent days reminds us that the likes of London Capital Group should enjoy better times until the end of this year, despite the woes of the past. This point is underlined by the October 4 report which stated that H1 revenues had doubled. The company may be some way away yet from returning to the levels of profitability it deserves, but with the chart showing a bullish falling wedge in place since the beginning of January, a break of the 4p resistance line could lead quite quickly over the following month to the main 8p resistance zone.


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