Quindell plc - The Week's Technical Analysis

Good morning,


Over the past couple of weeks we've seen some more decent signs of recovery from Quindell:


1. Roble's short interest has fallen from 4.46% to 4.28%.

2. The 130p support line has so far held on the daily chart (excluding the slight dip below on the close of October 15th), with the next major support line being at around 105p - a support line that originated from around 2012 and that was 

3. On 31st October we saw a 100,000 share buy from the non-execturive director Robert Bright.


Technical Analysis:


There are some pretty decent arguments for why technical analysis is irrelevant in the case of Quindell and many of these I agree strongly with - algorithmic share price suppression with structured intra-daily buy backs, etc.


I think that the promising sign here is what looks to be a slightly lopsided inverse head and shoulders pattern forming (September 26th being the left shoulder, October 15th and 16th being the head and with the right shoulder looking to be formed at around 130p), which is a bullish reversal pattern. 

For this to be confirmed, we would really need to see a rise from around 130p to 180 or above.


Using my Slow Stochastic Oscillator, it looks like we need to see K and D settle at around 11 before we can make a good much up, but comfortingly there does seem to be a gradual, rising stochastic trend-line in the lows of the indicator since late September, which is a promising sign that we're due a leg up soon. It's notable that since the Gotham City attack all technical indicators work better if you take them outside of their usual extreme zones (i.e. your usual stochastic range from 20-80 changes to 10-90). 


I've found that the RSI, CCI and MACD that I would usually use for extra input to have been significantly delayed in the case of Quindell, thus making them somewhat redundant.


The only other indicator that has been any real use since the Gotham City attack has been that of my fibonacci moving averages (not something normal people use, because they don't carry the same emotional responses in the market that say a 200 day moving average does). 


They're pretty good at calling reversals, and to pick some recent examples you could have used them to call reversals in early August, late September/early October and in mid October:


Currently, if we assume that the 130p daily support line will hold, then it makes logical sense that these should begin to turn soon for another leg up. In the event that this line doesn't hold, then we could be waiting a little while longer for another leg to the upside.


All the best,

The Masked Stock Trader