Finweek English Edition - - COMPANIES & MARKETS -

Buy at cur­rent lev­els or bet­ter for the medium term plus. Af­ter bas­ing side­ways for the past two and a half years, Basil Read looks ready to start its re­cov­ery. It’s formed a large in­verse head and shoul­ders (as la­belled) and re­cently broke out above line 2 (the “neck­line”). That’s point­ing to a higher tar­get. Note: There’s re­sis­tance at line 1 (1420c) but ex­pect that line to be bro­ken. Buy at cur­rent lev­els and if it pulls back to­wards line 3 (1230c), buy again (ie, add). Its price at the time of writ­ing was 1330c. The in­verse head and shoul­ders is point­ing to a min­i­mum tar­get of 1725c – ie, the height of that pat­tern pro­jected up. Once it breaks out above line 1 re­sis­tance (1420c) there will be lit­tle to stop it run­ning. Place your ini­tial stop-loss as a weekly close be­low line 3 – ie, be­low 1220c. Basil Read is a mid-cap but its chart in­di­cates (by im­pli­ca­tion) that down­side on large cap con­struc­tion stocks is lim­ited. They may retest – but un­likely to break – their 2011 lows.

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