This report is an updated version of the report published on 28 May 2024 at 06:05 AM GMT.

Company Overview: Inchcape plc (LON: INCH) operates as an automotive distributor and retailer. It engages in the distribution, sales, and marketing of new and used cars, and parts. The company also provides aftersales service and body shop repairs, and finance and insurance products and services. It operates in the Asia Pacific, the United Kingdom, rest of Europe, the Americas, and Africa. The company was founded in 1847 and is headquartered in London, the United Kingdom. McBride Plc (LON: MCB) is an FTSE All-Share index listed household goods company. It provides personal care and private label household products and supplies these to Europe based retailers. This Report covers the Price Action and Technical Indicators Analysis along with the Target Levels, Stop Loss, Support Levels, Resistance Levels, and Recommendations on these two stocks.

FTSE All-Share Index (.FTAS) Market Round-Up

The FTSE All-Share Index had a rough week previously but seems to be showing some resilience. The positive start in Asian markets after the holiday might provide some encouragement. The index is trading above a resistance zone and trend line, suggesting some bullish momentum. From a technical standpoint, it's interesting that the RSI (68.32) moving upwards indicates strengthening buying pressure, and the fact that the current market price is above the 21-period SMA and 50-period SMA suggests some support at those levels. 

Global Markets Wrap-Up

Wall Street witnessed positive movement last week, where the S&P 500 settled at 5304.71 with a gain of ~1.45 percent, while the NASDAQ Composite Index settled at 16920.79 with a gain of ~1.41 percent for the week ending May 24, 2024. 

Having understood the US market performance over the past week, taking cues from major global news, and based on technical analysis of the FTSE All-Share Index (.FTAS) for the upcoming week, now have a look at the two LSE-listed.

stocks pick from the technical analysis standpoint. Noted below are the recommendations based on entry price, target prices, and stop-loss for Inchcape plc (LON: INCH) and McBride Plc (LON: MCB) for the next 2-4 weeks duration:

Inchcape plc (LON: INCH) Noted below are the key price indicators for the recommended stock:

Price Action Analysis (on the Daily Chart)

On the daily chart, INCH’s shows some positive signs on the daily chart. The fact that prices are trading above the trendline suggests bullish momentum. Additionally, it's a good sign that the stock price is supported by both volumes and the RSI level, indicating potential for further upward movement. The mention of an important resistance level at GBX 922.00 is noteworthy. If prices continue to rise, they may indeed test this level in the short term, possibly within the next 2-4 weeks.

Technical Indicators Analysis (On the Daily Chart)

The RSI moving in the positive zone with a reading of 65.16 suggests that the stock has some bullish momentum, supported by volumes indicating increased trading activity. The CMP is trading above the trend-following indicators 21-period & 50-period SMAs and may act as a small support level.

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, Inchcape plc is looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock. Investment decisions should be made depending on an individual’s appetite for upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. The summary of recommendation is as follow:

McBride Plc (LON: MCB)

Price Action Analysis (on the Daily Chart)

On the daily chart, MCB’s price is trading above the last resistance and the breakout level indicates bullish momentum in the stock. This sentiment is reinforced by positive volume and the RSI level in the chart, suggesting increased buying activity and potential for further upward movement. With an important resistance level identified at GBX 144.00, it suggests that prices may potentially test this level in the short term, likely within the next 2-4 weeks.

Technical Indicators Analysis (On the Daily Chart)

On the daily chart, the RSI (14-Period) is moving in the positive zone with a reading of 69.58. The volumes also seem supportive of an upside movement. The CMP is trading above trending indicators 21-period & 50-period SMAs, supportive for the stock price.

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, McBride Plc looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock. Investment decisions should be made depending on an individual’s appetite for upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. The summary of recommendation is as follow:

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Upcoming Major Global Economic Events

Market events occur on a day-to-day basis depending on the frequency of the data and generally include an update on employment, inflation, GDP, consumer sentiments, etc. Noted below are the upcoming week's major global economic events that could impact the FTSE All-Share Index and listed stocks’ prices.

Related Risks: This report may be looked at from a high-risk perspective and recommendations are provided for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks, etc.

Note 1: Individuals can consider exiting from the stock if the Target Price mentioned as per the technical analysis has been achieved and subject to the factors discussed above.

Note 2: How to Read the Charts?

The Green colour line reflects the 21-period moving average while the red line indicates the 50-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume and liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: In general, it is a level to protect further losses in case of unfavorable movement in the stock prices.

Risk Reward Ratio: Risk reward ratio is the difference between an entry point to a stop loss and profit level. This report is based on ~60% Stop Loss of the Target 1 from the entry point.

A trailing stop-loss is a modification of stop-loss in case of favourable movement in the price to protect the gains. Individuals can Trail the Stop-Loss as per the aforementioned levels if the stock price achieves more than 50% of the Target 1. Individuals should consider exiting from the position as per the Trailing Stop-Loss level if the price starts moving downwards after achieving more than 50% of the Target 1.

The reference date for all price data, currency, technical indicators, support, and resistance levels is May 24, 2024. The reference data in this report has been partly sourced from REFINITIV.

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

GBP: British pound sterling

GBX: British pence sterling

RSI: Relative Strength Index

Note: Trading decisions require a thorough analysis by individuals. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.