Tesco chart pre-empts results

LAST week it was Next, and this time it's Tesco's. Surely charters can't have spotted another signal that tomorrow‘s supermarket results will be rosy? If the charts are right, it will be another upsurge for Tesco shares on Tuesday.

The UK market leader has enjoyed a good run. Last week came whispers that shoppers will soon be able to pick up more than groceries, electrical goods and clothing.

Tesco is about to enter the mortgage market. And this was enough to drive the stock higher - crucially, through an important resistance line at 273p.

Indeed, Tesco has outperformed the Footsie since April and after a brief consolidation phase over the summer has continued to do so since early September. So this latest move higher has built on an already bullish trading period.

The last eight weeks have seen the stock 10% higher, rising to their current level of 275p.

But what's really significant is the timing of the move. Strengthening shares ahead of Tuesday's results, technical traders expect more gains to come.

Initial targets following reasonable results will be the 2001 high at 282 1/4p, followed by 293 1/2p, the all-time high, reached in December 2000. Above this, the psychological 300p zone would feature, with cautious investors taking profits just ahead of this level.

On the downside, only a break of 266p would signal that the trend has turned to the downside.