Next shares up amid surprise jump in sales
The warm weather has been good for UK High Street retailer, Next plc as it reported robust sales for the second quarter.
(Video Transcript)
Next's Q2 sales surprise
There's been a good summer news story in the retail sector in the UK today around a trading statement from Next PLC.
It's posted a surprise jump in sales for the most recent quarter (Q2). It's been cashing in on the heat wave and also says that a return to wedding venues has made it possible to earn profits out of formalwear as well.
The High Street retailer said full price sales were up 5% in the second quarter of the year, and that was £50 million ahead of the previous guidance. So, there we are then with a good news story.
Next share price
Let's take a look at the how this translates into the share price, which is interesting in as much as today, it's broken resistance.
It's gone above the 200-moving average intraday, which was just at around about the 70 level or 7000 level. Now this significantly has got us very close to this line not seen since the 1st of March 2022.
But look at where we've come from. If you look at the COVID period, where it was at 7202 before COVID all the way down at 33,34 at COVID lows, losing 53%.
Since then we've gone well above the pre-COVID trading levels and we're pushing up again. And we've got this double bottom pattern here, which has been established from the two lows that we had, first of all, coming in on the 7th of March this year, and then the second lower hit there, the 16th June, with this bounce off, what was then taken as the neckline, you then get a break of that, which is what we had here. And the projection that takes us up to 7605, levels there not seen since the highs we had back on the 31st of January.
Now that's the direction of travel. If you are long on this, your stock goes below this line of support down here. So you'll stop at around about the 6550 level, 6885 is where we are, 7605 is the technical projection.
You may not get that in which case you'll have to adjust your trades accordingly. But so long as you follow the trend, if it continues, and you keep your stops coming up underneath you, you're locking in profits along the way.
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