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Barratt Development shares continue to drift

Just over a week away from Barratt’s interim management statement, and the shares are testing some long term support.

Since the beginning of January 2009 the share price of Barratt Developments increased seven-fold, but in the last two months have dropped by almost 23%.

Obviously the UK housing market continues to be buoyant and this has certainly benefitted the company, clearly helped by George Osborne’s budget comments that he would be extending the home buyers scheme, which was devised to help first-time buyers into the market.  House builders like Barratt have seen sales boom on the back of this. Their still appears to be a shortage of supply to the market, with a recent report from property analysts Hometrack stating that 97% of properties in the UK are sold for the asking price.

Yesterday saw Barratt’s share price move into oversold territory on the RSI and, as long as the share price continues to close above the 345p level, we would expect to see a bounce.

Barratt Developments chart

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