How to trade Dixons Carphone shares

Dixons Carphone (LSE:DC.)

With all the usual nonsense about the release of a new iPhone, we thought it may prove worthwhile to view how one of the mobile outlets' share prices is doing. Not so great, it turns out. But the changes may ring soon. (boom boom)

Currently, Dixons Carphone shares are trading around the 147p level and, given the circled manipulation gap on the chart, it appears probable the market intends to drive it a bit lower.

The immediate situation is a bit grotty insofar as movement now below 145p tends to suggest coming weakness toward 128p with secondary, if broken, at an eventual 53p!

To even escape the immediate downtrend, the share price currently requires better than 176p. This sort of achievement opens the door for growth toward 216p initially with secondary, if bettered, a longer term 267p.

There's something probably worth considering about our proposed bottom of 128p, as we tend to expect the price to bounce should this number make an appearance.

If attempting a trade to see where it goes - sensibly above the 128p level - then placing a stop at 113p makes sense. Our reasoning with the 113p argument is we cannot calculate any price level between this point and 53p.

In theory, the stop could be at 127p, but the problem comes as, if a bounce occurs, the market is liable to scourge just below the 128p to collect any stops emplaced.

It's one of these nice services the market sometimes offers traders, just to ensure they are spared the pleasure of watching a trade grow in value.

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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