Logica (Log): signs of recovery

[Riz]

After touching 4 years low at 373 LOG seems to have bottomed out and on the way to recovery...

On an upmove of 19 on friday it also broke through the major resistance and pivot point of 400 to end the week at 404...

RSI and stochastics both on the daily chart and the 15 min chart suggesting further upmoves...also notice the engulfing upcandle formed on both charts...

Apart from bottoming out and +ve market sentiment, the news of direcor buy and LOG bieng "part of a consortium confirmed as preferred bidder for the £2 billion Skynet 5 contract to develop a satellite communication system for the British armed forces" also helping the recovery of Logica which "is next week expected to lose its place in the FTSE 100 after seeing its market value fall to £1.8 billion"...

If Log can consolidate above 400 and break through resistance which seems to be at 411/2 it looks like current levels might be the bottom of its trading range from now on suggesting an uptrend to around 500...

Will Log manage to make it? Time will tell but both charts and +ve news flow plus market sentiment suggesting there is more to the upside than the downside...

So maybe it's time we put LOG back on watchlist as of Monday

Riz

 

[Riz]

And here is the 15 min chart coloured flat lines are pivots...

Riz

 

[Riz]

Supported by a solid Nasdaq also boosted by news it has agreed a software deal with Genie, the mobile internet business of mmO2 23.0, ended the day up +23 (5.7%) at 427,
also worth to note that it ignored Oracle's profit warning on Friday which normally would push LOG lower...

Riz

 

[Riz]

I am surprised LOG, once one of the darlings of this site, recieved no responses here this time in spite of all classic signs of recovery...still I wouldnt blame those trying to avoid it as it obviously has disappointed many at the time of PW

Ended the day up again +23 (5.4%) at 450 on news it has won its first two Multimedia Messaging Service (MMS) contracts and
an additional five MMS trials, all to be rolled out during the first half of 2002.

"The two contract wins supported hopes that the IT services group may remain in the blue-chip index in tonight's FTSE review."

The 3 whitemen, rsi breaking through 30 line and still sharply ticking up, both stochastics ticking up with K crossing over 20 line that acted as resistance for a while, D also hitting it all suggesting LOG may still carry on with its journey up, well bon voyage!

Riz

 

[Riz]

Back up after retracment as JP Morgan's analysts upgraded itfrom hold to buy raising the target from 550 to 590, apparently finding that competition fears have been overplayed after undertaking an industry survey.

Ended the day up +23 at 447...

Chart still looking good with rsi and stochastics trending up, still got to break 466 resistance first though...

Riz

 

[Riz]

Down -3.0 to 460.5...not bad considering the sentiment, just updating news on LOG

Riz


LONDON (AFX) - Shares in Logica PLC were lower in morning deals, seeing their two-day rally fade as investors chose to book profits in a falling market, with additional pressure coming as Citigroup downgraded its stance on the IT services group, dealers said.

Logica was downgraded to 'underweight' from 'hold' on a target of 450 pence by Citigroup, the umbrella asset management firm whose affiliations include Solomon Brothers, Citibank and Smith Barney.

Its analyst was concerned over a sharper than expected slowdown in earnings at the group's key mobile networks division, and also cited valuation concerns following the stock's 20 pct rebound from lows.

Citigroup's study of Logica's SMS software business in Japan and the near-term outlook for its MMS software products led the broker to cut 2002 EPS estimates by 1 pct, with a further 5 pct reduction in 2003.

This leaves Citigroup estimating Logica's group EPS growth at just 2 pct year-on-year for both this year and next.

Shares in Logica have rallied in recent sessions as hopes revived that the group may be able to capture a share of the MMS market amid tougher competition.

The UK group announced two contract wins with undisclosed parties earlier this month, while a recent survey by JP Morgan revealed 12 pct of global wireless operators surveyed were considering it as a probable or possible supplier.

Citigroup concedes that Logica is likely to be an important player in the MMS software market. But it thinks the market will take some time to develop, and does not expect any meaningful revenues before late 2003, with operating margins under pressure due to increased competition.

Logica has 50 pct profit exposure to its mobile telecoms products where there is significant uncertainty regarding future earnings, meaning the risk-reward is not in stock's favour, Citigroup's analyst advised clients in a morning note.

At 11.12 am, shares in Logica were down 8-1/2 pence to 455.

 

[Riz]

Having failed to reach and break through 500 LOG started falling on news that cmg winning contracts on them and negative nasdaq sentiment...the fall seems to be overdone though as it bounced +11 to 424 on friday forming a bullish harami on the daily candlestick chart and leaving both stochastics oversold with K sharply ticking up and just crossing over D...unlike the fall in february volume seemed to be light this time...overall it looks like LOG not giving up and may try again if the sentiment in general allows...

Riz