Zak’s Weekend Chart Round-Up

FTSE 350 Stocks

Domino’s Pizza (LON:DOM): Breakout towards 500p Expected

It will be interesting to see how the takeaway food market – and Domino’s Pizza’s position within it – maps out with respect to the Just Eat (LON:JE.) and Deliveroo offerings. In the meantime, it would appear that the stock market is keen on the pizza specialist, which is said in the wake of the latest breakout for the shares through former 2015 intraday resistance at 373p. Indeed, we already have the 10 day moving average at 378p, and making for a useful end of day close stop loss for those wishing to follow the latest move higher. As for how high the stock may extend, it would appear we are looking at the possibility of further significant gains. This is said on the basis that it is possible to draw in a rising trend channel from as long ago as October. The resistance line projection of the channel is currently pointing as high as 500p, and this is the expected destination for the shares as soon as the next 4-6 weeks.

EasyJet (LON:EZJ): Triple Bottom Reversal

It is often the case that just when traders and investors capitulate with regard to the “negative” fundamentals on a stock or market, that is when the big turnaround happens. The explanation for this is with all the weak hands out, there is only one way for the price action to head – up. This may be what has happened to shares of EasyJet this week, given the way that the doom and gloom has been piled on for several weeks. But it could be the situation has attracted some bottom fishers, at least on the basis that the fall in oil prices in recent days will almost certainly help the no frills airline. As far as the technicals are concerned it can be seen that we have just been treated to a bounce after a third temporary probe below the 1,000p level. What may be key over the next few weeks is the former June intraday floor at 990p. The assumption to make is that provided there is no end of day close back below this figure we could feel the benefits of a bullish falling wedge reversal which can be drawn from as long ago as the beginning of June. The potential target while above the June floor is a return to the mid-July peak at 1,178p as soon as the end of next month.

Pearson (LON:PSON): Gap down Risks 770p

It has to be said that the delay in Pearson in selling the Financial Times has to go along with the LSE (LON:LSE) not allowing itself to be taken over – one of the great mysteries of the stock market in recent years. So now it would appear that it is all about education as far as Pearson is concerned, with the market in what used to be a relatively robust area proving to be more challenging in recent times. This point is backed by the way the stock has been punished severely in the wake of the latest reported revenues miss. Indeed, one might suggest that the decline here has been somewhat overdone in terms of the triple digit fall. But the problem from a technical perspective is that provided there is no break back above the 50 day moving average at 895p on an end of day close basis, we could see the stock fall back to the floor of a falling trend channel from February at 770p over the next 3-4 weeks. The hope would be that the stock finds some support at the 200 day moving average at 836p, but at this stage one might say the decline ending at this level would be something of a let off after the latest gap to the downside.

Small Caps

Ferrexpo (LON:FXPO): 2015 Price Channel Targets 70p

Although we have been able to enjoy the recovery in the mining sector almost across the board since the beginning of the year, it may be said that the real pleasure as far as the rebound is concerned has been provided by the minnows. Few have delivered more cheer than Ferrexpo, where the company was clearly under something of a cloud in the wake of the Ukraine/Russia dispute. But the iron ore producer operating in Ukraine looks to have put any such issues behind it, and since the turn of the year this situation has very much been in favour of the bulls. What can be said of the present charting position is that it is possible to draw a rising trend channel on the daily chart, with the floor of the channel running at 37.83p and level with the 20 day moving average. All of this suggests that while support remains above the 20 day line we could be treated to a best case scenario target as high as the top of a September rising trend channel at 70p. The timeframe on such a move is regarded as being the next 2-3 months.

Foxtons (LON:FOXT): Risk of Another Sub 100p Dip

It is usually wise to pick out charts which are rather more clear-cut than the one that estate agent Foxtons is currently sporting. However, this is an intriguing battle between the bears and the bulls. What is clear is that there is some buying interest towards 100p, as we have seen as the week draws to a close. However, the balance is still just tipped on the side of the bears given the quadruple failure by the RSI indicator to clear the neutral 50 level during July. This suggests that any strength here should be sold into – at least while there is no end of day close back above the latest 122p intraday resistance. Indeed, if 122p continues to be the top for the stock one would fear we could see a retest of the July intraday support at 95p, although to suggest anything more on the downside at this stage towards the post Brexit vote low near 50p can be regarded as overly pessimistic.