BWY

The brown-field development specialist housebuilder has seen its shares coming under some pressure after keeping

a long, well-established uptrend, which lasted around three years. Recently the stock has plunged, slashing around 25% from the autumn highs of £17.00 or so.

Richard Cunningham, managing director at City Index Advisory, says: ‘The current level now takes the price to a 20% discount to our fair value reading and places the RSI (relative strength index) into technically oversold territory.’ The decline also came despite the government’s renewed focus on housing, which should boost sentiment as well as sales for the sector. While the stock is not likely to return to the highs seen last autumn, there is a clear buying opportunity. City Index’s medium-term target is over £15, representing a 20% upside to the current level. A stop loss, according to Cunningham, should be just below the £12 level.

ACTION BUY Bellway • Target £15 • Stop loss £11.50

TIME TARGET: 5 WEEKS