Taylor Wimpey remains confident in the strength of the UK housing market

Taylor Wimpey shares jumped after the house building company said 2020 profit looks set to top forecasts

Uptrend 2

Taylor Wimpey shares jumped after the house building company said 2020 profit looks set to top forecasts.

The company said: "In addition to a stronger volume performance we also expect our ongoing focus on cost and efficiency, strong embedded margin in the landbank and supportive market pricing to benefit the Group's 2021 operating margin performance. Assuming the market remains broadly stable, we therefore currently expect to deliver operating profit in 2021 materially above the top end of the current consensus range."

From a chartist’s point of view, the stock price escaped from an inverted Head & Shoulders pattern and is now facing a challenging resistance near 140p. The daily RSI (14) is pushing above its horizontal resistance in place since March 2020. A price pullback towards the new support zone between 116.5p and 123.3p cannot be ruled out.  A breakout confirmation of 140p would call for a rise towards 155.7p and 170.4p. Only a break below 116.5p would invalidate the bullish view and would open a path to see Sep 21 low at 98.1p.

Source: GAIN Capital, TradingView

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