FTSE 100 stock GlaxoSmithKline PLC (LON:GSK) is up almost 20% since June’s vote to leave the European Union, but it could go much higher according to technical analysis.
Chart guru Zak Mir expects the blue chip stock, a heavyweight in the FTSE 100, to strengthen and in turn help the index consolidate above the 7,000 marker.
Glaxo is one of London’s big ‘dollar earners’ - with the vast majority of its sales coming from the US and international markets - and as such it has been seen as a beneficiary of the pounds weakness as the world contemplates Brexit.
Looking specifically at Glaxo and its share price chart, Mir described a “nice looking technical situation”.
Mir, in a Tip TV segment for Proactive Investors, sees the price rising to around £19 per share from the current price just shy of £17.00.
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“We had the bounce from the Brexit vote at the end of June, and this [chart] looks as though it is going to head up into a rising trend channel and up towards the £19 level, while we [the trend] remains above £16,” he said.
The Glaxo price is trying to break higher and is looking positive, Mir added.
Glaxo, aside from the Brexit related forex machinations, is also notable for being a leading name in a sector boosted recently by an increased popularity among investors.
Drug companies and technology y plays have been favoured over the past eighteen months or so as oil and metal prices succumbed to cyclical pressures and oversupply. A meaty blue-chip dividend yield has also been a factor for those seeking defence too, albeit Glaxo will always be something of a stalwart in most portfolios anyway.
In recent months Glaxo has had a mostly positive time in the clinic, with drug pipeline news more good than bad, and last month it announced details of its chief executive succession plans.
Emma Walmsley, who has been running Glaxo’s consumer healthcare business, is stepping up to replace Andrew Witty at the end of March.
The City’s reaction was to the switch was somewhat negative, with a number of investors ruing the group’s choice to promote from within rather than seek new blood for the boardroom.