A mid-cap worth keeping an eye on

HOWDEN JOINERY (LSE:HWDN)

Every now and then, we get a bunch of emails asking about a share we have tended to ignore. Sometimes, this grouping of interest can suggest news is brewing, sometimes it suggests someone is talking rubbish in discussion forums, and sometimes it's because it's a bank and we've ignored it again.

Howdens is perhaps presenting a different picture, one worth keeping an eye on.

To get the glaringly obvious out of the way, the big circle on the chart - the Brexit manipulation gap - continues to irritate as these movements the morning after the vote did more harm to the markets than most politicians can aspire, all on the basis that nothing had actually happened (yet).

Howdens still has not recovered above the price level pre-manipulation, needing better than 510p before we dare suspect the market has admitted it overacted with the drop.

The price situation with Howden is it needs below 336p to inspire concern, along with a cut down to 300p initially with secondary a very possible bounce point around 235p. Visually, any warning of such a calamity will be weakness below the red line, 400p at time of writing.

However, we shall be more interested if it manages better than 479p anytime soon as a cycle starts toward an initial boring 526p. It's the secondary, if such a level is beaten, which is of special interest as it comes in at 585p.

This would represent a new all-time high for the share, something we've droned on about recently when the FTSE started achieve Higher Highs. In the case of Howden Joinery, the implication becomes a distant attraction from 641p.

If wishing to embrace sanity and safety with this scenario, waiting until the share actually starts closing sessions above 531p will confirm the Higher High argument.

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.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

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.