All of these stocks have featured in the news recently. Future (LON:FUTR) is the subject of a short-selling attack from Shawdowfall Research, who believe that it is ‘incredulous’ to believe that management can turn a collection of shrinking assets into a “cohesive, profitable and cash generate enterprise”.
Aston Martin (LON:AML) has also been saved by Canadian billionaire Lawrence Stroll in recent weeks, but that doesn’t mean the troubles have gone away.
Finally, Ceres Power Holdings (LON:CWR) has been on a surge since Bosch revealed that they had taken a stake in the business, more than doubling since the start of December last year.
It’s very easy to get caught up in the market noise, but I prefer to tune it all out just by focusing on the charts. This is what matters, because the price action tells us everything we need to know.
Future Group (FUTR)
This is a stock that has been kind to many private investors, with the price rising from my first entry around 266p to highs of nearly 1600p.
But like all good stories, there has to be an ending. Future is now teetering on the brink when we look at the chart, and how the stock responds over the next few sessions will give us an indication of how it will trend.
When I trade, I like to look for significant levels and areas where volume has increased as shares are swapped with gusto. I also want to see where the stock has reacted so that I can spot this.
Let’s look at Future’s chart over the last few years.
Does anything stand out?
First of all, the stock has not traded below the 200 MA since 2016. That is immediately a significant level. When the price is doing something that it hasn’t done for a very long time – it’s a warning that perhaps things are changing.
We can see that the stock traded below the 200 MA briefly, before rallying and faltering.
In my opinion, the low-hanging fruit on Future has been picked. Even though the company is still producing “materially ahead” RNS statements, management took several millions out of the business for themselves. Everyone has heard of Future Group…
