Chart of the week: Buy or sell this FTSE 100 dividend king?

TL;DR

Taylor Wimpey, a major UK house builder, experienced a massive collapse during the credit crunch and is now showing potential signs of another crash.

Transcript

hello this is John Burford and this is chart of the week for the 7th of May and today I'm focusing on Taylor Wimpey one of the major UK house builders and I'll start off by showing the weekly chart goes back to the year 2000 and 2/3 that's pretty much long enough for me to get a handle on the overall picture this this of course was the tremendous b... Read More

Key Insights

• 💦 Taylor Wimpey experienced an unprecedented collapse during the credit crunch, dropping from £4 to 3p.
• 🎚️ Resistance at the £2 level has repeatedly caused bounces downward in Taylor Wimpey's price.
• 🛀 The daily chart shows sharp momentum divergence, indicating a potential reversal.
• ❓ The correlation between the US and UK housing markets suggests a potential crash in the UK housing market.
• 😘 Lower credit standards in the US and reports of house flipping add to the concerns of a potential crash.
• 🖐️ Liquidity in the global financial market plays a significant role in the behavior of both the US and UK housing markets.
• ✋ The recent rally in Taylor Wimpey's price may be a signal for a major high in the UK property market.

Questions & Answers

Q: How did Taylor Wimpey perform during the credit crunch?

Taylor Wimpey experienced a massive collapse during the credit crunch, dropping from £4 to 3p. This level of decline is unprecedented for a major house builder.

Q: What are the recent price movements and resistance levels for Taylor Wimpey?

Taylor Wimpey recently reached a high of £2 and faced resistance at this level multiple times, leading to bounces downward. The current price is threatening to touch the £2 area again.

Q: What indicators suggest a potential reversal in Taylor Wimpey's price?

The daily chart shows sharp momentum divergence and a retest of the lower tramline, indicating a potential reversal. Additionally, the Fibonacci 76% level has been hit, which is usually a signal for a reversal.

Q: What is the overall outlook for the UK housing market?

Considering the potential crash in Taylor Wimpey and the correlation between the US and UK housing markets, it is suggested that the UK housing market may be heading for a crash.

Summary & Key Takeaways

• Taylor Wimpey saw a massive collapse in 2007 during the credit crunch, dropping from £4 to 3p, which is unprecedented for a major house builder.

• After a reversal in 2013, Taylor Wimpey reached a recent high of £2, facing resistance and a potential repeat of the previous crash.

• The daily chart shows resistance at the £2 level and a recent sharp rally phase, indicating a potential reversal and a major high in the UK property market.