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Vodafone (Q3 trading update 1 February)
A key element in the Vodafone investment case is its dividend, and now that the firm has come through a period of investment and transition, the risk of a cut is decreasing markedly. Rising free cash flow provides another attraction, while the firm recently boosted its full-year earnings forecast, with income expected to rise 10%, from a previous estimate of 4-8%.
In an environment populated by many great uptrends (see Shell, below), Vodafone’s chart generates a degree of ennui, at least in this analyst’s mind. However, the rally into the first half of January did at least break out from the May 2017 high, even if it still failed to clear the 2016 high at 240p. Momentum is now oversold, so a bounce is possible, with longer-term support at 215p, and then 205p.