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Persimmon (PSN) 792p

The UK’s largest house builder said in January that, much like its peers, it would see lower volumes but it would manage to meet profit expectations when posting full year numbers, due 26 February. Those numbers will show forward sales down from £701 million to £603 million into 2008. Yet the company is trying desperately to stay upbeat, especially with the usually busy spring selling season on the horizon, while hopes for further interest rate cuts could reinforce confidence in home buyers. This seems a lot to ask and while the shares have rallied recently, the technical picture has changed radically and we could witness a rapid decline in the share price, according to Christian Blaabjerg, market strategist at Saxo Bank. He says: ‘The price has been rejected at the upper band of the downward trend channel at 896p, and is now moving downwards.’ We reckon the best call is short targeting a move towards the lower band of the channel at 642p, but place a stop loss at 830p just in case.

ACTION: SELL Persimmon • Target 712p • Stop Loss 830p

TIME TARGET: 4 WEEKS