- Virgin money stock has been trading sideways for the entire year trapping the investors.
- The stock gave a healthy breakout in July but faced a strong rejection post that.
- The stock is again stuck in a zone and the setup does not look very strong.
Virgin Money UK Plc engages in the provision of banking services. It operates through the following segments: Business, Personal, and Mortgages. The company was founded in March 2016 and is headquartered in Glasgow, the United Kingdom.
This firm is highly stable in terms of finances. There is a constant income net revenue every year with positive cash flows. The past 2 years were a little negative in terms of revenue but were covered up in 2022. 2023 has been pretty good for the company because the incoming numbers look great.
Technical analysis for the stock:
The VMUK stock saw a huge downfall in the initial few months of 2023. It fell to its lowest-ever levels. £1.40 became the stock’s lowest-ever support and was tested several times. After months of complete range-bound movement, the stock finally saw a breakout to its year-opening levels. It was still rejected from its resistance at £1.82. The stock finally saw a breakdown to its immediate support at £1.59 with very strong selling. It has been trading sideways since.
If we look at the current setup, sellers hold a strong position as of now. The stock has consistently given a gap-up opening after testing its support at £1.59. It has always closed in red. That means the sellers are pretty active. Therefore, the chances of recovery as of now look low.
£1.59 to £1.73 looks like a highly strong zone for the stock. Until the stock trades between this zone, it is tough to predict what lies ahead.
If we see a breakdown from the current levels, £1.50 looks like a strong support below which, the only support lies at £1.40. If a breakdown occurs from the current levels, the chances of a big downside move go up.
On the other hand, some sort of recovery may occur in the upcoming weeks and the stock may breach its resistance at £1.73. We can see healthy buying from there because it will be a positive zone for the stock.
A good buying position can be made above £1.80 with £2 as the first target.
On an hourly chart, we see a few more levels that have acted as ranges for the stock. We can see a good pullback from £1.6 levels and another rejection from £1.66 for the stock. The current setup looks confusing as the stock has been moving sideways. It does not give a strong confirmation for movement on either side. A good move can be expected if the stock crosses the £1.66 level. The £1.74 will be our next resistance.
The downside scenario remains the same. Currently, we can expect more sideways movement as investors look highly confused as of now. Technical indicators including 50 and 100 EMA suggest a possible sideways movement as of now.
Analysts suggest the stock will cross £2.10 levels in the next 1 year. It is more than a 30% upside from the current levels. A good buying entry can be made above £1.80, but research more to make a beneficial move.
Conclusion:
The stock has been bearish for the past few weeks. It stands at strong demand zones as of now. Therefore, a further downside is less likely to happen. The stock has a lot of important supply zones ahead. A good buy entry can only be made after the stock breaches its upcoming resistance levels. One must watch the stock for a few weeks before making an entry.
Important technical levels:
Major support levels: 1.6£ followed by £1.5.
Major resistance levels: 1.66£ followed by £1.81.
