Long recommendation on Vodafone intact

Price at time of writing – 219.8p.

I recently highlighted the very strong breakout above a decade-long resistance in the shares of Vodafone. 

This breakout, which occurred as a result of Vodafone's shares rising above 205p, implies an eventual price target centred around 289p. After some initial and healthy sideways churn, momentum appears to have picked up again, with the shares recently recording an intraday high of 223p. The recommendation remains entirely intact.

As the shares advance deeper into this new and higher trading range, we should note the road towards 289p has one area of notable resistance. This can be seen on the chart in a tight band defined as 232-235p, where two short-term percentages align to support the line representing a 200% rise from the major low in 2002. As the share price consolidates in that area, traders may consider booking profits before re-entering at a lower level.

As I mentioned in my previous Vodafone update, maintaining the ground above 200-205p is all that counts now. So long as this support is preserved, the new uptrend will remain intact.

Recommendation: Stay long. The ultimate target is 289p. Short-term traders may consider taking profits at 234p, and seek to re-enter at a lower level. Longer-term investors should stay the course. Stop-losses can be raised now and activated on momentum below 200p.

Vodafone Group plc chart

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This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.