The Next share price roller-coaster continues. Hold on tight! The shares have gapped sharply higher this morning as investors embrace a better-than-expected Christmas trading update which allowed management to upgrade guidance. This is understandably helping shares of fellow UK retailers from whom we await similar festive trading updates in the days and weeks to come.

However, today’s update has merely helped Next shares close November’s gap down from 4900p, when a Q3 sales miss and trimming of guidance reversed much of the optimism that had returned following a brace of summer guidance upgrades which took the shares back to their best in 12 months, inspiring fresh hope following an 18-month downtrend. Furthermore, we are only back to the levels from which we fell before last year’s disappointing January update, one which triggered a 14% fall, adding to shareholder woes and starting 2017 on the wrong foot.

As much as today’s update is good news in itself (positive full price sales growth, outlook positive), and adds to share buyback and special dividend goodies, management’s update-by-update tinkering of guidance (that’s four in a row now), and sharp share price reactions only goes to reinforce how shareholders remain at the mercy of the UK consumer from one season to the next and exposed to short-termism. Oh! And how bricks and mortar retail (-6.1% in 54 days to Dec 24) continues to give way to the internet (+13.6%).

Bulls will be glad that today’s update keeps 2017’s uptrend and reversal alive. However, those with a more technical focus will note completion of a December bullish flag pattern at 4900p that may cap gains (shares already off highs). They may also head into preliminary full year results on March 23 with an air of caution regarding guidance. As they’ve found out lately three months is a long time and trends can change quickly.

Mike van Dulken, Head of Research, 3 Jan 2018