2018 has already been a year of ups and downs, with a plethora of stocks rising to trade at multi-year or even all-time highs in January before succumbing to February’s global market correction. However, a number of stocks have continued to follow trends that began in 2017 or earlier, and have extended their channels in March. Of all the trend-following stocks, these UK 100 companies have the most notable ranges.

Two of the most impressive trends belong to relative UK 100 newcomers.

NMC Health (NMC – right), the Middle Eastern-focused hospital chain, only gained admission to the UK’s blue chip index in September 2017, however the stock has consistently been one of the best weekly performers on the index. This comes thanks to its impressive rising channel, which began back in early 2016.

On multiple occasions over the 24 month period, shares have rallied to the channel ceiling (or ‘resistance’), before retreating back to the channel floor (or rising lows ‘support’), at which point the cycle starts all over again.

Meanwhile, fellow UK 100 newcomer Just Eat (JE. – below) has been on a similar upward trajectory. After a shaky start following its 2014 IPO, the company has since enjoyed an impressive streak of rising lows, which can find its roots from early 2016 lows.

In that time – from January 2016 lows to January 2018 highs – the company’s shares rallied up to 180% while even now, two years after the trend began, time and time again the shares have bounced from the same rising lows support level whilst retreating from resistance at the channel ceiling. In fact, the shares have only broken below the support level once in the past 24 months, and that was this week!

But why should you be paying attention to these trend following stocks?

The key with trending stocks is that they don’t just offer the long-term, multi-year primary trade, but that they also offer much shorter term trades as well, often against the direction of the longer term trend.

For example, the aforementioned Just Eat reported full-year results on Tuesday. The shares fell 12.5% (falling to 14.9% at its session lows), its single worst session ever and wiping £600m from its market cap. However, the shares fell to a key 2-year rising lows support level, the support underpinning the group’s rising channel and helped to stop any further losses. Even today, the shares continue to trade in the channel.

Knowing that these stocks are trending, as well as having the facility to short the shares to profit from falling prices as well as rising ones, are key tools to have in your trading kit.

These are just two of the facilities that we offer at Accendo Markets. Our trading platform allows our clients to short-sell stocks, while our award-winning research utilises technical analysis techniques to identify key trading levels.  You can test it out for yourself by signing up here to have it delivered directly to your inbox.

David Paradis, Trader, 9 March 2018