Nowadays, financials have price moves like that of small caps. Old Mutual, shown here, went up by 50% in two months. Prices have been going up ever since the breakaway gap at 120p last month.
Technically, we would not chase the stock higher from here. Its momentum indicators are all in overbought territories; while prices are at the top of the medium-term range at 150p. Meanwhile, prices are far above its 50-day moving average.
A better entry range is to watch for a consolidation into the 130p range. Place stop at the prior resistance at 120p.
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January 23, 2012
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