Shares digital

InterContinental Hotels (IHG) 772.5p

Bid speculation has seen the shares regain some of the ground lost in 2007 (see page 42 this week), although not much. The shares have taken a battering over the past eight months or so, falling from June highs of £14 all the way down to 650p in December.

Christian Blaabjerg, market strategist at Saxo Bank, reckons the stock is still in a clear downtrend and that the current rise in the price could be rejected in the upper band of the channel.

In terms of newsflow, the share price more than halved last year due to the weak dollar. The company has said that it has not seen a slowdown in demand from US consumers but, if both the US and UK are going in for a slowdown, it seems unsafe to target the hotels sector with reduced consumer spending. Analysts are divided about the shares but we think the technical argument is strong, and see the opportunity to sell in the short term.

ACTION: SELL InterContinental Hotels • Target 695p • Stop loss 815p

TIME TARGET: 3 WEEKS