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

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.