Sage Group forms a potential continuation HS pattern

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By :  ,  Financial Analyst

Sage Group shares nearing support

Sage Group, an enterprise software company, said full-year underlying EPS fell 1.6% on year to 27.43p on organic recurring revenue of 1.59 billion pounds, up 8.5%. Underlying operating profit dropped 6.7% to 411 million pounds and missed estimates. The company proposed a dividend of 17.25p per share, up 2.0%. Regarding the outlook, the company said: "Against the uncertain economic backdrop, we currently expect organic recurring revenue growth for FY21 to be in the region of 3% to 5%, weighted towards the second half of the year. We also expect other revenue (SSRS and processing) to continue to decline, in line with our strategy."

From a chartist’s point of view, the stock price is under pressure below the resistance level at 701p. A long term trading range takes place between 826p and 515p, indicating that the downward trend could be limited by the key support at 515p. In addition, a potential continuation Head & Shoulders pattern is taking shape. Readers may want to consider the potential for opening long positions above the support threshold at 515 with 701p and 775p as targets. Caution: a break below 515p would call for a long term reversal down trend with 378p as first target.

Source: GAIN Capital, TradingView

Related tags: Coronavirus Equities UK

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