FTSE All-Share Traded Higher; Two LSE Listed Stocks Gaining Upside Momentum – IMI AND VSVS

Company Overview: IMI PLC (LON: IMI) is a specialist engineering company. The Company designs, builds, and services engineered products in fluid and motion control applications. The company’s segments include Automation and Life Technology. Vesuvius PLC (LON: VSVS) is a United Kingdom-based company, which is engaged in molten metal flow engineering and technology. The company’s segments include Steel and Foundry. 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

Last week the FTSE All-Share Index (.FTAS) settled on a positive note, following the bullish move from the US equity markets. Notably, FTAS settled at 4621.70 with a gain of ~3.25% for the week ending January 17, 2025. The recent move in the domestic indices is majorly led by the negative indications from the global equity markets.     

From a technical perspective, the index demonstrates a bullish bias, trading above a key ascending trendline and breaking through a horizontal resistance zone, signalling the potential for continued upward momentum. The 14-period RSI stands at 60.66, indicating sustained bullish sentiment. Furthermore, the current market price (CMP) is above the 50-period Simple Moving Average (SMA), reinforcing support levels and strengthening the positive market outlook. These technical factors suggest that the index will likely maintain its upward trajectory, providing a favourable outlook for further gains in the near term.

Global Markets Wrap-Up

Wall Street indices inched higher in the last week and settled on a positive note. Notably, the S&P 500 settled at 5996.66 with a gain of ~2.91%, while the NASDAQ Composite Index settled at 19630.20 with a gain of ~2.45% for the week ending January 17, 2025.

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 IMI PLC (LON: IMI) and Vesuvius PLC (LON: VSVS) for the next 2-4 weeks duration:

IMI PLC (LON: IMI) Noted below are the key price indicators for the recommended stock:

Price Action Analysis (on the Weekly Chart)

On the weekly chart, IMI shows strong bullish momentum, trading above an upward sloping trendline and within an ascending channel, accompanied by a positive candlestick pattern. These factors suggest the potential for continued upward movement. The stock remains well above key support levels, indicating further upside. As it nears resistance at GBX 2202.00, this level is expected to be tested within the next 2-4 weeks. A breakout above this resistance, particularly with rising volume, could drive the stock toward the next resistance at GBX 2355.00, reinforcing the bullish outlook with strong confidence.

Technical Indicators Analysis (On the Weekly Chart)

The RSI moving in the positive zone with a reading of 64.26 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 (SMA) may act as a small support level.

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, IMI PLC (LON: IMI) 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:

Vesuvius PLC (LON: VSVS)

Price Action Analysis (on the Daily Chart)

On the daily chart, VSVS is positioned above an upward trendline, with a bullish candlestick pattern indicating strong upward momentum. This is further confirmed by rising trading volume at current price levels. The stock is nearing resistance at GBX 465.00, likely to be tested in the next 2-4 weeks while maintaining its position above the ascending trendline. A breakout above GBX 465.00, supported by higher volumes, could push the stock towards the next resistance at GBX 500.00, strengthening the bullish outlook with high accuracy and the potential for continued gains.

Technical Indicators Analysis (On the Daily Chart)

The RSI moving in the positive zone with a reading of 51.37 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, Vesuvius PLC (LON: VSVS) 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: Past performance is not a reliable indicator of future performance. 

Note 2: Individuals can consider existing from the stock if the Target Price mentioned as per the technical analysis has been achieved and subject to the factors discussed above. 

Note 3: 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 January 20, 2025. 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.