Shares digital

Imperial Tobacco (IMT) £24.43

In such rocky markets, even those shares that are most widely regarded as defensive can suffer. Imperial Tobacco, however, should be a rewarding bet especially as the acquisition of Spanish rival Altadis enters the final phase, with the banks starting the syndication of a loan for Imperial to finance the deal. Most importantly, Imperial’s shares present some strong technical features that punters should look at. Richard Cunningham, managing director at City Index Advisory, says: ‘From a technical perspective, this is one of a few stocks that continues to display a positive-trending 200 day average, suggesting that the primary price trend remains bullish.’ In fact, notes Cunningham, the current price remains positioned above this average and the stock is trading at a discount to fair value. We go long but place a stop loss on a close under the £23.20 support level, below which the current technical picture could change significantly.

ACTION: BUY Imp. Tobacco • Target £26.50 • Stop Loss £23.20

TIME TARGET: 5 WEEKS