Majestic Wine preview (Technical)

Wednesday, 14th June 2017 14:58 - by Rajan Dhall

Majestic Wine is set to report profits of £12m as it publishes its full-year results tomorrow. the Co. is likely to post earnings in line with expectations, according to analysts. The Co. who recently lost its director John Colley last month to Hobbycraft is trading higher this year and this is despite a rise in inflation and a squeeze in wages. In its half year report in November the Co. reported a £4.4m loss and stated they expected full-year profits to be in line with expectations due to cost control measures.

From a price point of view, we can see a text book formation of ahead and shoulders pattern. The 356p mark is now a very important level as it would indicate a reversal in trend as price could make a lower high and a lower low if broken. If the news is negative the value are of 350p may be tested as price has spent some time there and on the upside the 400p area is a massive area of resistance and the Co. would need something special to retest there, but stranger things have happened. Looking at the price action alone the chart looks like its forming a corrective pattern but 360p has been well supported this fast week or so.