Where now for the BT share price as Neil Woodford buys in?

Neil Woodford has bought up shares in various blue-chip stocks, including Lloyds, British American Tobacco and BT, with the fund manager looking to make his suspended flagship fund more liquid ahead of its reopening in December.

Investors remain trapped in the suspended Woodford Equity Income Fund, with the beleaguered fund manger using the suspension to sell-off its shareholdings in smaller, illiquid stocks in favour of FTSE 100 companies.

‘We are very sorry for the continued suspension and understand the concern it will be causing investors,’ Woodford said. ‘We remain fully committed to getting the fund into a position that delivers the best possible outcomes for our investors – for those who wish to withdraw their money from the fund when it reopens and for those who wish to stay.’

BT shares down 25% since January

BT continues to see its stock underperform the market, with it down more than 25% on a year-to-date basis, while the FTSE 100 has risen 10% over the same timeframe.

The company is more than a year and half into its turnaround strategy which the telecoms provider embarked on after its stock hit a six-year low at the beginning of last year.

In a bid to curtail its stock falling further, BT is looking to cut 13,000 jobs across the group and investing billions in rolling out superfast fibre broadband across the UK.

BT: Technical Analysis

BT shares have gained ground over the past month, with the weekly chart highlighting the rise into the 20-week simple moving average (middle Bollinger band). That rally comes within a widespread downturn that has seen the stock lose 56% in less than four-years.

Within that journey, the middle Bollinger band has proven a reliable selling point, with price invariably turning lower at or around this indicator. This provides a bearish backdrop to the stock despite recent upside. The key levels to watch on this chart will be £2.18 and £2.48.

The daily chart provides a more detailed view, with price trading in the upper zone of the Bollinger band this month. However, this looks like a retracement of the selloff from £1.99, thus bringing the Fibonacci levels into play.

Thus far we have seen a rally into the 61.8% Fibonacci retracement level, and thus with the weekly chart highlighting the possibility of a bearish reversal from 20-SMA resistance, this 61.8-76.4% retracement zone looks prime for another bearish turn in this stock.