A High Probability breakout trade in CYBG is near.

UK- based CYBG Plc (CYBG.L) is the holding company for CYB Investments Limited (CYBI) and Clydesdale Bank PLC (Clydesdale Bank). The Company owns National Australia Bank Limited’s Clydesdale and Yorkshire Bank operations (the Clydesdale Bank business). Clydesdale Bank provides banking services to UK SME’s, with products and services including mortgages, current accounts, deposits, term lending, personal loans, working capital solutions, overdrafts, credit cards and payment and transaction services. Clydesdale Bank consists of approximately 120 Clydesdale Bank-branded branches and approximately 150 Yorkshire Bank-branded branches.

On the 31st of October, I drew CYBG.L to the attention of those reading this blog. The share is undervalued on VectorVest and growing earnings per share (EPS) strongly and safely. Over the last few days, VectorVest has increased the valuation of the share to 487p as the rate of growth of EPS has jumped. The share is pushing on old highs and trading at 317p.

The chart of CYBG.L is shown below using my normal notation where valuation is shown by the green line study above the price and EPS by the blue line study in the window below the price.

CYBG VectorVest timing chart
Click or tap image to enlarge.

Technically, the share is trading in a tight range and has found support on three occasions at a previous significant high. Eagle-eyed candlestick analysts should have noticed the positive patterns which were caused by strong accumulation of the share at the 300p level at the end of November 2017. This accumulation at the lows of the day is invariably caused by strong and very well-informed hands at work.

Superimposed on the chart are the longest Market Timing signals on VectorVest as shown by the green and red triangles. These are known as Confirmed Calls. The London market printed a red triangle (Sell Signal) on November 17th, and as I write on the afternoon of the 7th December, both the short term trend and the long term trend of the UK market is down. The advice on the front page of VectorVest is to sit on hands and that’s excellent advice.

As the overall market has been falling since November 17th 2017 the share price of CYBG.L has stayed strong and I judge this relative strength as very positive for the share, if and when, the general market should turn upwards. The share is on a hold recommendation on VectorVest.

If the overall market prints a Confirmed Call Up (green triangle) and CYBG.L prints a Buy recommendation, then a strong break out of this sideways range is highly probable. A 33% to 50% move should be expected if these conditions are met.

As always, although this share is of interest to me, it may not be suitable for you.

To find many opportunities like this and put some structure and rules into your trading business, try VectorVest UK and USA for 5 weeks. Just click or tap here.

David Paul

7th Dec 2017

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