Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading
Ibstock plc (LON: IBST) shares have fallen 14.74% over the past month and are now trading at a crucial support level. Will the level hold, triggering a bounce higher?
Well, given that Ibstock shares have fallen in an almost parabolic manner since September 1, 2021, I would not be surprised if we get a bounce off this crucial support level, or at the very least, some sideways trading as the sellers take a break.
Interestingly, Ibstock’s recent downtrend was not fueled by a significant negative announcement, given that the clay brick maker’s last major release was its H1 2021 earnings results, where it reported upbeat earnings as the UK construction industry recovers.
Ibstock made a profit of £11 million ($15 million) driven by the strong recovery witnessed in the UK construction industry after generating revenues worth £202 million, a significant jump from the £131 million reported in H1 2020.
While there is no clear fundamental trigger behind the latest downtrend, it is clear that the brick maker’s stock is under intense pressure, probably as investors expect the UK’s construction industry to cool off in the fourth quarter.
However, the recent selloff has left Ibstock shares trading at a significant discount to their intrinsic value making the stock attractive to investors and short-term traders who want to profit from price swings.
Most investment analysts have singled out Ibstock as one of the cheapest value stocks currently trading on the London Stock Exchange (LSE). The company earns extra points for being a dividend payer following its latest dividend announcement for H1.
Investors should pay attention to Ibstock’s share price in the future to find out if the support level will holding creating an excellent opportunity for a bounce, which could benefit both long-term investors and short-term traders.
*This is not investment advice.
Ibstock share price.
Ibstock shares have fallen 14.74% over the past month and are at a crucial support level. Will it hold?
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