TW stock price prediction: Prices Weak After the Earnings Report

• TW share price is looking to take support from its 200 EMA
• The earnings report has shown a decline in revenue.
• The stock is above its EMAs but the MACD and RSI gave a sell signal.

Highlights of the Half-yearly report of June 23

The revenue of Taylor Wimpey as per the report is GBX 1.64Bn which represents a decline of 21% year on year (YOY).

The operating profit for the stock as per the report is GBX 237M which is a negative growth of 43% YOY. 

The stock is net positive as per its report, with a value of GBX 176M. However,  it represents a YOY decline of 32%.

The PE ratio of the stock is 6.52 with a return on equity of 12.72, as per the last year’s net profit. 

The operating margin for the company stands at 14.5% as per the last year’s annual report.

The net profit margin for the company stands at 10.7% as per the last year’s annual report.

The company is very low on debt with a Debt to equity ratio of just 0.03 as per the last year’s annual report.

Taylor Wimpey’s Recent Price Action and Technical Analysis

After the dividend announcement back in October 2022, TW share price started rising from GBX 86.6 to GBX 126 in February 2023.

The price of GBX 118 in March 2023 was again propelled by its December 2022 earnings report where the revenue was posted with a gain of 12% year on year. This made the price hike up to the level of GBX 119.4.

Currently, at the time of writing, TW share price has given a gap-up opening beyond its 50 EMA and is trading at the level of GBX 117.7. The stock price is between some supports and resistances, while the indicators are also giving some insights for the near future. 

Support: The demand zone which is the first support is at the level of its recent broken resistance, at GBX 113.2, and the second support is at the price value of GBX 105.85.

Resistance: the immediate price rejection level is at GBX 121.2 followed by the second resistance at GBX 128.3.

MACD: In the MACD graph, the MA line crossed the signal line, showing a bullish sentiment that started back in July 2023, and the difference between the two continued until now where they are touching each other, looking for a bearish crossover. The values stand as follows:

 MACD: 2.564 and Signal line: 2.433

RSi: The RSI graph is indicating strength in the price at the RSI line is near 61 followed by its SMA at 65. This cross-over of the difference between the two may cause the price to fall in the short-term. 

EMAs: The 50 EMA crossed the 200 EMA back in June which also resulted in a correction, but since a trend reversal is seen, it now stands close to the immediate support with a price value of GBX 113.4.

The 200 EMA is at GBX 115.1, and it is seen in consolidation with a straight line looking to go into an uptrend in the near future if the bullish momentum continues.

Conclusion

The TW share price prediction suggests that the price movement is closely correlated with the behavior of the EMAs. Both the 200 EMA and the 50 EMA are currently situated in close proximity to the current price. The 200 EMA recently provided support to the bulls and appears poised to do so again in the near future. Additionally, the 50 EMA is on the verge of crossing over the 200 EMA, which could indicate a potential bullish signal.

On the other hand, the presence of a bearish sentiment is indicated by the signals from the MACD and RSI indicators. The weak financials of the stock, including negative growth, further support the potential for a bearish trend.

If a downtrend materializes, the levels beyond the first support may become important zones to consider for selling. 

Technicals:

Support: GBX 113.25, GBX 105.85

Resistance: GBX 121.25, GBX 128.35

RSI: 61

50 EMA: GBX 113.4

200 EMA: GBX 115.05

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.