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52-week high and low: Bellway and Hunting

New yearly highs or lows in a share price are keenly sought after by traders, as they can be a clear indication of momentum. This week has already seen two, house builder Bellway and oil services firm Hunting. 

House builders at work
Source: Bloomberg

Bellway looks set to break its record highs
It has been a good year for Bellway shares, up 35% versus a 3% decline for the FTSE 100 so far. On a P/E of 11 and a 2.9% dividend yield, the shares look attractive from a fundamental standpoint. There are concerns that the UK housing sector is reaching a tipping point, but it is hard to argue with a 44% increase in pre-tax profit in the most recent set of final results, coupled with a 48% increase in the dividend.

In recent sessions, Bellway shares have hit new highs for the year, and indeed new all-time highs. They surpassed their 2007 peak back in 2014, and barring small drops in spring of that year and some losses in September 2015, have barely looked back.

Yesterday’s close above £26 took them to new highs, and while they are pulling back today, a fresh move above £26 should be regarded as a bullish development. Short-term support is likely around £24.50 and then £23.50.

Bellway

Hunting at the opposite end of the spectrum
Things could not be more different for Hunting, in a sector beset by falling oil prices and significant cutbacks to new exploration. Exposure to the US onshore market has proven to be the company’s real Achilles Heel, which is why it has suffered more than rivals Petrofac and Wood Group. A forward P/E of 25 is not unduly expensive, but still understates the downsides as the oil price remains under pressure.

The move downwards over the past two days has put the share price at its lowest level since 2008. As a result, we are looking at a monthly chart with a downside target of 322p, and even on to the October 2008 low of 270p. Rallies back to resistance at 380p and also 400p may occur, but these are likely to fall into the category of fresh ‘selling opportunities’. 

Hunting

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