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To refresh our memory, the break above decade-long resistance at 205p implies an eventual move to my new target at 289p.
However, as already discussed, there is one area along the path to 289p which may allow nimble traders to book profits then re-enter later, following a period of consolidation. This areas lies in a tight band defined as 232-235p, and has a percentage marking a 200% rise from the major low in 2002 at its core. It has been a long road for Vodafone since it (and others) overpaid the UK government for its 2G network licence. But, with last week's high of 230p coming very close to fulfilling this intermediate target, shareholders are at last being rewarded with some outperformance.
As Vodafone's shares approach this short-term resistance, those with long positions must decide which cap they wish to wear – that of a trader or an investor. More patient investors should ignore the heightened potential for consolidation in this area and focus on the bigger target.
Recommendation: stay long. Ultimate target 289p. Short-term traders may consider taking profits at 234p, and seek to re-enter at a later date. Longer-term investors should stay the course. Stop-losses can remain in place and be activated on an unlikely break below 200p.