Long recommendation on Vodafone intact

Price at time of writing – 219.8p.

I recently highlighted the very strong breakout above a decade-long resistance in the shares of Vodafone. 

This breakout, which occurred as a result of Vodafone's shares rising above 205p, implies an eventual price target centred around 289p. After some initial and healthy sideways churn, momentum appears to have picked up again, with the shares recently recording an intraday high of 223p. The recommendation remains entirely intact.

As the shares advance deeper into this new and higher trading range, we should note the road towards 289p has one area of notable resistance. This can be seen on the chart in a tight band defined as 232-235p, where two short-term percentages align to support the line representing a 200% rise from the major low in 2002. As the share price consolidates in that area, traders may consider booking profits before re-entering at a lower level.

As I mentioned in my previous Vodafone update, maintaining the ground above 200-205p is all that counts now. So long as this support is preserved, the new uptrend will remain intact.

Recommendation: Stay long. The ultimate target is 289p. Short-term traders may consider taking profits at 234p, and seek to re-enter at a lower level. Longer-term investors should stay the course. Stop-losses can be raised now and activated on momentum below 200p.

Vodafone Group plc chart

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