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Home / Trade Alert / Buy – GlaxoSmithKline (GSK)

This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.

Buy – GlaxoSmithKline (GSK) - 12 July 2017

Trade Parameters

  • Opening Price: 1617p
  • Stop Loss: 1590p (27p/1.7% below)
  • Profit Limit: 1700p (83.0p/5.1% above)
  • Reward vs Risk: 3.1x
  • CFD Margin: 5%

Observations – For

  • Bounce off 1600p – pivotal since early Feb
  • December rising lows support
  • Back above 200-day moving average (1611p)
  • 4-hourly stochastics and RSI back from oversold
  • ADX turning over, suggesting bullish reversal

Observations – Against

  • Daily momentum still negative
  • Daily RSI & Stochastics still oversold
  • No bullish cross on daily directional indicators
  • No bullish reversal on daily Point & Figure chart
  • Not quite a 3-day or 3% reversal confirmation

Analyst Comments

Attractive technical signals and set-up after bounce from long-term rising support. Potential for US healthcare bill to help shares as it could unlock the door to deregulation. Share may be oversold on HIV franchise growth concerns. Potential benefit from positive drug news and any further GBP weakness related to Brexit.

Consensus is biased bullish, although the many neutrals offer potential for upgrades as the shares rebound, helping the shares rally further. Note 79% of broker target prices suggest upside from current levels. The July average of broker updates is for 1722p which is just above our trade objective and corresponds with June highs .

Next Event: Q2 Results, 26 July

Latest Broker 12-Month Consensus:  41% Buy, 53% Hold, 6Sell (full breakdown on request)

Source: DowJones Newswires, Reuters News, Bloomberg  or Company Press releases

Broker Ratings & 12-Month Target Prices (Bloomberg)

5-month (4-hourly); MACD, Stochastics, Relative Strength Index, Momentum & Trend Strength

Share 1wk 1m 3m 6m 1yr 2yr 3yr 4yr 5yr
Perf % -0.7 -4.8 -1.7 2.2 -2.8 18.0 3.5 -7.2 10.4
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