Here's where Northgate shares should rebound

Northgate (LSE:NTG)

Few things are more frustrating than evenings, sitting in the garden surrounded by mountains, watching a bunch of sailing boats pretending to race on a flat calm sea, while sipping alcohol-free cider and realising nothing particularly is happening worth writing about for this headline section.

Thankfully, someone emailed plaintively asking a quick opinion on Northgate, a company we hadn't even appreciated was listed on the market!

Dreading summer is about more than a 26c evening in Scotland, it's about the salient detail many shares do very little as most folks brains are sliding into holiday mode.

Currently trading around 428p, the share requires better than 486p to escape the immediate downtrend which points to 376p as being potentially coated with trampoline juice.

The funny thing is, while this is below the prior lows in November 2016, the ambition is solidly above the long-term uptrend since 2012 and, due to current price movements being forced due to manipulation (circled), we'd tend to hope for a bounce if 376p appears. The danger comes if 376p breaks as we next calculate 302p as possible, trashing the long-term uptrend.

However, if we pretend confidence and believe our 376p makes an appears, what can be hoped for?

Firstly, there's the immediate downtrend which is at 486p, so we'd need to look for anything capable of boosting the price above such a point. Even trading above 460p would impart considerable hope as we're able to compute coming movements to 545p, breaking the immediate trend and placing the price rather neatly at the level it flatlined for four months earlier this year.

With closure above 545p, we'd need to review the tea leaves as an entirely new ball game opens for the future.

For now, our suggestion is this is worth watching if it approaches 376p as some sort of rebound looks likely. And if it betters 460p, further oomph becomes possible.

Now, it's time to open the red wine and enjoy the last embers of sunset in that uniquely Scottish thing, the gloaming. And perhaps praise the outdoor fan which blows the midges away from the table.

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. 

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