Charts indicate possible upward surge at Thomas Cook

Thomas Cook Group (LSE:TCG)

Many men go through life, wondering what they will next do to irritate their wife. A good idea led to a surprise 8/10 level of nuisance. When asked to quickly blend her soup, apparently using a high torque hand-drill is not allowed despite the tool fitting perfectly.

This, of course, leads us to Thomas Cook and their recent nasty drop. Absolutely nothing to do with the soup incident as that was just a funny story needing told, similar to the time she asked a frozen leg of lamb to be cut in half. Like Bosch drills, electric saws are a big no-no. The soup did blend faster than it took TCG's price to drop.

Are TCG suffering, perhaps due to folk avoiding Spain due to its political regime? Or is the price indulging in something which has happened quite a lot recently, the fabled "backtesting the trend" scenario?

We think it probably is a trend thing and the tell-tale will come if the price betters 115p in the days ahead. This would tick the first box suggesting the drop was indeed a "backtest".

The next box needing a tick comes along at 120.5p, due to near-term traffic above 115p calculating with this target. We've painted a light blue trend line on the chart, which advises TCG would be wise to wait until next week or so before an attempt at the trend, due to achieving target also exceeding the immediate downtrend. In theory, we're able to calculate an upward surge toward a longer term 139p in such a game play.

Are there sharks in the water?

The red line on the chart paints the uptrend for the last year. The price needs a move below 100p to worry us, this allowing weakness toward 94p initially with secondary, if broken, at 72p.

Such a disaster would imply, for Thomas Cook, 2017 has been a waste of time. Oddly, the FTSE shares an identical sentiment.

PS. the soup did not need salt. It appears a high torque whisk released perfect seasoning from the veg.

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.

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