RSS Galvan Chartbreaker - BELOW STANDARD (212p)
By Ed Woolfitt | 13 April 2011, 13:24 BST
Ed Woolfitt, Head of Trading at Galvan
At the begining of March, insurer Standard Life revealed net adjusted inflows had risen 46% and said it has made a strong start to 2011. Excluding volatile and lower revenue yield UK money market funds and India cash funds, net inflows jumped to £8.3bn, with long-term savings net flows up 77% to £4.7bn. Overall the group said that IFRS operating profit before tax from continuing operations grew by 7% to £425m, and core European Embedded Value (EEV) increased 24% to £629m.
Despite the higher inflows last year, the market is clearly less than impressed with the overall fundamental returns from Standard Life, particularly in regard to the lower revenue yield UK money market and India cash funds. Galvan Research believes this uncertainty, coupled with the bearish technical picture marks Standard Life shares out as a sell for the near term.
The Standard Life technicals appear unusually bearish in the sense that following a March triple top reversal formation at 240p the shares retreated via a gap to the downside towards the 200p zone. While below the 200-day moving average at 218p, our target for the stock is a retest of the March support at 198p.
| Dream Scenario | Sentiment towards Standard Life remains dull as investors seek more exciting fundamental opportunities elsewhere in the sector. | Stock | Standard Life |
| Nightmare Scenario | As the share price nears the bottom of the recent 200p - 240p range, bargain hunters take the view that Standard Life shares are cheap. | Epic Code | SL. |
| Price Target | 198p | Year High | 244p |
| Stop Loss | 221p | Year Low | 173p |
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Source: Galvan Research and Trading
