It would appear that at least as far as ailing online estate agent, Purplebricks is concerned, German media group Axel Springer having built up a 26.6% stake to date is akin to the backing Mike Ashley has served up for the High Street.
The situation has been complicated by the presence of kiss of death fund manager Neil Woodford also being on the shareholder register. What is interesting about the latest surge in the Purplebricks share price is whether it is off the back of Axel Springer topping up its shareholding from 26.6% towards the 29.9% level at which it would be obliged to make a full offer for the company. In some ways it would be better if Woodford has offloaded some of his stock to the German group, given his ongoing need to raise cash.
At least as far as the daily chart perspective is concerned, the price action today is significant in that there has been a clean break of the 200 day moving average at 133p. Also important is the way that since July the stock has found support at and above its 50 day moving average now at 116p – even on dips. Both these features suggest rare technical strength, something which seems at odds with the company’s fundamentals, but in line with the idea that Axel Springer may pounce on the UK group, or at least be topping up its holding. The charting implication is that while there is no end of day close back below the 200 day line the upside here for the stock over the next 4-6 weeks could be as great as 180p at the top of a rising trend channel from February.