Chart of the week: FTSE 100 stock flashes warning sign

TL;DR

Burberry's stock has shown limited growth over the past two years, and the current chart suggests a potential downward correction.

Transcript

hello this is John Burford and this is chart of the week for Tuesday the 23rd of April just after the Easter break and today I'm looking at Burberry which is a share which our last covered two years ago in fact it's gone pretty much nowhere in those two years it's up a touch from the April 2017 level but hardly worth shouting about but anyway I'll ... Read More

Key Insights

• 🛀 Burberry's stock has shown limited growth over the past two years, making it a relatively stagnant investment.
• 👋 The weekly chart displays a clear 5-wave pattern, suggesting an imminent correction.
• 🎚️ The daily chart indicates a potential rally towards the Fibonacci retracement level, providing an opportunity for a downturn.
• 🛟 Momentum divergences on both charts serve as warnings for potential reversals.

Questions & Answers

Q: How has Burberry's stock performed in the past two years?

Burberry's stock has shown limited growth over the past two years, with minimal gains since April 2017.

Q: What does the wave pattern on the weekly chart indicate?

The wave pattern on the weekly chart suggests a potential correction in Burberry's stock, either in a 5-wave or 3-wave downtrend.

Q: What is the expected target for the potential downward move?

If a 5-wave downtrend occurs, it could reach the previous low of around 10 or 11 pounds. If it is a 3-wave downtrend, the target would be near the tramline at around 16 pounds.

Q: What is the current trend on the daily chart?

The daily chart indicates a final upward move in Burberry's stock, likely towards the Fibonacci 62% retracement level at around 20 to 20.60 pounds.

Summary & Key Takeaways

• Burberry's stock has been stagnant since April 2017, with minimal gains.

• The weekly chart shows a clear 5-wave pattern, indicating a potential correction.

• The daily chart suggests a final upward move towards the Fibonacci 62% retracement level before a possible downturn.