Shares digital

Marks & Spencer (MKS) 383.5p

The high street food and fashion retailer is facing the threat of a substantial slowdown in consumer spending. Adding to its woes there is shareholder anger towards its decision to appoint chief executive Sir Stuart Rose as executive chairman, a move that breaks the corporate government code. But the main reason to short the shares is the fundamental correlation between UK retail sales and mortgage approvals, believes Christian Blaabjerg, market strategist at Saxo Bank. He says: ‘During the last year mortgage approvals dropped dramatically from 121,000 in January 2007 to 74,000 in January 2008. This move has not been reflected in the UK Retail Sales time series. Since UK retail sales should go lower we are recommending to short sell Marks and Spencer which is one of the companies that will be hit when the trend alters direction.’ Go short, keeping a relatively wide stop loss at 410p to offset volatility and targeting a wider move towards 318p.

ACTION: SELL Marks & Spencer • Target 317p • Stop Loss 410p

TIME TARGET: 6 WEEKS