When to buy this big property play

Countrywide has been the subject of rather a few emails recently. The primary cause appears to be a belief the share price has probably bottomed at two quid and that this is therefore a safe entry level. At time of writing, it closed the day at 202p.

Unfortunately, the computer does not agree!

From a software perspective, this currently needs to better 280p ('blue') to cancel a logical target at 170p, this being a point around which some sort of bounce can be hoped. The problem comes if the share closes a session below 169p, as apparently the final bottom should be at 127p.

This is one of the funny things about share price movements - and a reason we assiduously avoid terms like "support" and "resistance". Neither term has any basis in fact, just a vague supposition amongst some traders that a particular price level is important.

Despite a fairly frothy market, we suspect the next "buy me" sign will present itself at 170pDespite Countrywide flouncing around the two quid level for most of October, we suspect it will prove to be simply a state of mind. Our problem comes from the 230p level.

This was our previous drop target, one achieved following the Brexit vote. Unfortunately, it broke and therefore our suspected next drop target is 170p, where - ideally - the share shall experience a bounce with rather more ambition than that experienced when our 230p thing was hit.

As for the current fascination with 200p: despite a fairly frothy market, we suspect the next "buy me" sign will present itself at 170p. Whether any resultant bounce betters 'blue' is obviously the big question, as 355p calculates as an initial upward surge target.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.