Can 'residual strength' drive Vodafone higher?

There are days when it feels the stockmarket is going through the motions and Wednesday 25 October certainly fulfilled any criteria for boredom.

If we're honest, it was an "alphabet" day: one where it appears the focus of absolutely everyone's trading was, broadly speaking, on the A-to-Ms. This sort of rubbish happens fairly often. Tuesday, a similar-feeling day, dealt with the N-Zs!

Because we monitor so many shares, when we scan what's happened on a day, a preponderance of alerts on any half of our screen gives a pretty solid clue that our evening is about to be wasted, essentially confirming thoughts already given.

As can be assumed, we utterly hate periods like this. It's almost as if everyone is awaiting something important happening - perhaps Brexit, perhaps an announcement of new toilet paper in the Kremlin's loo.

Hearing on the radio that Vodafone was to be fined millions for incompetence, we eagerly anticipated the share breaking free from its recent slumber and doing something interesting.

It didn't.

The price needs to better 237p currently to convince of a serious rise or drop a line below 209p to disconnect from reality. It. Did. Nothing.

Perhaps this indicates residual strength, when faced with bad news. It results in the situation where, if anything near-term above 227.6p betters 230p, we shall suspect it of getting ready to become useful, as the secondary is at 239.8p.

The implication behind such a secondary ambition will be of the downtrend since last year breaking and the share price moving into a region where a long-term 262p becomes viable, challenging the highs of 2015.

Currently trading around 226p, the price needs to fail below 220p to raise an eyebrow, as this signals weakness coming to 213p. In itself, not entirely threatening - but our secondary if such a point breaks calculates at 196p and a break of the immediate uptrend.

Worse, in such a region, bad news could drive 150p swifter than Vodafone inflict a price change.

But for now, it remains trading in a region where the stockmarket seems content to play alphabet games.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.