Berkeley Group

Friday, 17th March 2017 09:34 - by Rajan Dhall

The housing sector in the UK is a key concern for both the government and population as whole, with rising numbers over the years causing clear problems with supply and demand. Berkeley Group believe that the red tape around planning permission is the problem.

After dropping out of the FTSE100 following the EU referendum result, the company has seen a 34% rise in pre-tax profits to GBP 392.7mln in the six months to the end of October last year, up from GBP 293.3mln over the same period the previous year. So clearly the companies fortunes have bounced back and they look to be performing well even against their peers. Interestingly there have been many rumors in the sector with various name touted to purchase beleaguered Bovis homes. This company is a serious contender, but there are few signals on any potential M&A activity.  

Deutsche bank, HSBC and Barclays all share my view that this company is still a long term buy regardless of the results tomorrow I feel that the Co. are in good stead to profit from the housing crisis and excel to reach past the 3000 area.

From a technical standpoint shares are in an uptrend but on the weekly chart we are hitting a great wall of resistance at 3000. This result could be the catalyst for a break above that pivotal level or a move back into the mean value are of 2900 is results are bad. Indecently the 50% fib level from the high on the daily chart to the current swing low of 2011 on the daily chart is currently providing some support to price and this level looks like it will hold into the release. Another level to keep an eye on if results are bad is the 2800 area, historically we have seen strong support here and the level could be used to provide a base. In my personal opinion price action looks bullish traders look like they are looking for a excuse to break higher and we may see that tomorrow.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.