B&B ready for the big break

BARGAIN hunters are still buying banking stocks, and this week technical traders are firmly focussed on Bradford & Bingley.

The past seven days have seen a reversal of fortunes for banks with prices and volumes rocketing as traders lead the way in hunt for undervalued shares.

No longer the worst performing sector of 2004, trades have been almost entirely 'buys'. Set after set of positive earnings results is driving both the sector and the index higher.

But technical traders are keeping a close eye on Bradford & Bingley. Due to unveil first half results this Friday, analyst consensus is forecasting a weak set of figures. But its easy to see why this is critical timing.

B&B has been in a 'bear' channel for the whole year, crushing prices from 330p to a recent low of just 250p.

This is a classic technical trend forming a 'sawtooth' pattern as each time the stock hits the channel resistance line it moves lower. That is until now.

The past week of chart data is catching the eye of chartists. Sector strength combined with bid speculation has blasted shares through this upper channel resistance at 267p, and now consolidated just above at around 270p.

Combine a strong banking sector, a chart 'break-out' and fundamental brokers expecting a poor set of figures and it seems certain anything other than a disastrous set of figures will see this stock fly higher. Initial upside targets are 290p.

On a cautious note, bad news will send shares below the 267p level and then back towards 250p.

i> Stockwatch is written by William Akerman of Quantigma. For more views on techical analysis, go to www.quantigma.com

For the latest views on stocks and markets, listen to 'Market-Buzz‘ at www.easy2spreadbet.com