Wolseley struggles to make progress

Ahead of its results later in the month, plumbing supplier Wolseley has seen its rally stall around the £35 mark, and is now testing its 200-day moving average.

The year 2012 marked the beginning of a sustained rally in the share price of Wolseley. Since then, however, it has run out of steam, even as the UK house building sector continues to see strong growth.

First-half results should see a steady growth in sales, while investors should look out for continued dividend growth; a strong point for this company, as dividends have risen 30% over the past five years.

Ahead of these figures, we continue to watch the 200-DMA after the steady decline in the shares during March. Having neared recent highs just above £35, we have seen them drop below the 50- and 100-DMA, although they have yet to move into oversold territory.

The February low, just above £32, is the first line of support to watch out for, but the bigger area would be at £31, where the shares found a bottom during December 2013. On the upside, £35-£35.50 is the key area to break and then around £37.40, representing the highs of late 2007 and early 2008.

Wolseley is an interesting one to watch, but so long as the 200-DMA holds (or, at least, does not begin to move lower), the uptrend here is intact.

Wolseley chart

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