Chart of the day: Next to mean revert?

October 1, 2012 | Filed under: Premium,Stocks | Posted by:

Next delivered one of the best long-term returns in the market. From the crisis low of 840p in 2009, the stock surged to a high of 3660p recently (see right).

However, after a period of strong gains a stock usually mean reverts. This is to unwind its overbought technicals.

Next may be in this phase. The stock gapped down from 3600p last month and has been struggling to reassert the uptrend ward since. The recent rebound to 3450p may be an ideal entry range for a short-term sell.

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Dr Jackson Wong

Dr Wong (London & international team): obtained his doctorate degree in finance from Durham Business School, UK. His research specialised in technical indicators and chart patterns in the global fixed income markets. He is currently covering UK, Fixed Income and European hotlines. Dr Wong has been producing the well respected Hotline for the last five years.

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