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Being a heavily-weighted component of the FTSE 100, any sharp move in Vodafone will have a significant impact on the UK benchmark index, with follow-on implications for direct traders of the index itself.
The progress of the shares since the sale of the firm’s Verizon interest has been steady, if not stellar. Nonetheless, to have maintained ground above the crucial previous resistance band defined as 200-205p is all that counts. A short period of sideways graft, as the shares enter a new and higher trading range, is good base-building behaviour, and unwinds a somewhat overbought Relative Strength Indicator (RSI) in the same process. Nothing in the progress of Vodafone's shares over the past fortnight seeds any doubt that they are set for a period of refreshed growth, culminating in a move to their next line of major resistance at 289p.
No shares move in a straight line, of course, and Vodafone's shares will probably hesitate around minor resistance in a band defined as 232-235p. I have added this band to today's chart. Aggressive traders may wish to book some profit at this level and re-enter after some corrective behaviour. Longer-term investors should simply ignore that likely consolidation phase.
Recommendation: buy or stay long. Target 289p. Stop-losses can be activated on weakness beneath 189p.