TCG – Thomas Cook – reading the tea leaves

I haven’t owned TCG for a few years now. It had been an excellent investment for me. I recall that I sold out at about 155p. The shares have had a poor performance since then.

I thought the recent chart on TCG looked interesting. TCG seems to have broken its downtrend (line sloping downward), and has since been in uptrend. After a strong upward move, the shares have been caught in a consolidation zone (rectanglular box).

My anticipation is thefore that the shares should break out of this zone on the upside. The fly in the ointment is the market’s disappointing reaction to their Q1 trading statement on 9 Feb. They did, however, report that the summer 2017’s booking were 9% ahead of last year.

The market reacted favourably to TUI’s Q1 results on 14 Feb, where they guided at least a 10% growth in EBITDA in 2016/7.

So things “should” be OK for TCG, fundamentally; with some qualification.

Chart-wise, the support level for TCG is about 85p, so we could see the share price dip lower from here. If the shares fall below, say, 82p, then I would take this as an indication of breakdown in support, with the next stop being 80p, and much lower if that level is taken out.

But I am going to predict that the share price will be higher 6 months down the line. I’ll report back then, and see how well the prediction was.

This post comes with a more than usual number of caveats: I do not own shares in TCG, and is really just a way for me to test my fundamental and technical analysis reading. So don’t take this post seriously at all. It’s just for fun.

Stay safe out there.

87.77p

Update 22-Feb-2017: I note that both Sharelock Holmes and Stockopedia have TCG on EV/EBITDAs of less than 4. This is a bullish factor.

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About mcturra2000

Computer programmer living in Scotland.
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