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Wolseley (half-year earnings 28 March)
Wolseley enjoyed an excellent year, helped by its strong US operations, which helped to counter poorer performance in the European division. With some of the new administration’s stimulus looking uncertain, we could see some of this premium shaved off. Nonetheless, the first-half update should point towards good growth and an encouraging outlook for the rest of the year, helped by a weaker pound.
Wolseley shares have probably baked in a little too much good news, but the trend is undeniably upwards. A close below £48.43 would signal some weakness ahead, and this will be magnified if we lose the post-Brexit rising trendline. Areas of support in any bigger sell-off could be £46 and then £44, while the rally will need to post a daily close above the recent high near £52 to indicate that more gains are on the way.
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