WTB Stock Facing Rejection After Yearly High: Breakdown Ahead? 

• Last week, the stock price touched its yearly high at £35.4.
• An immediate rejection brought down the price to current levels at £33.58.
• The setup looks weak as of now and if the stock does not sustain at the current levels, a big downside can be expected ahead.

WTB plc is a multinational British hotel and restaurant company headquartered in Houghton Regis, England.

The business was founded as a brewery in 1742, and had become the largest brewery in the world by the 1780s.

Its largest division is currently Premier Inn, which is the largest hotel brand in the UK with over 785 hotels and 72,000 rooms. Until January 2019, it owned Costa Coffee but then sold it to The Coca-Cola Company. WTB brands include the restaurant chains Beefeater, Brewers Fayre, and Table Table.

Financially, the company looks very stable with a constant growth in total revenue per year. 2020 saw a huge downfall in the number but the company made an instant comeback in the next year. The past two years have been great for the company in terms of earnings and revenue. 

Technical Analysis

The stock has been highly bullish this entire year, giving an almost 30% return since january. The WTB stock recently reached its highest point of the year, reaching £35.4. However, this price level triggered a swift and substantial selling response from investors. A constant doji formation signals a highly confused and weak market as of now. 

The current levels of £33.58 have acted as a support in the past month and if the stock goes below the current levels, the chances of a big downside increase significantly. 

£32.98 is the last hope for ]investors. As long as the stock stays above those levels, there is not much need to worry. If the stock slumps below this, then the current view for the stock will turn bearish. 

£31.79 is the next strong support for the stock in case of a downside, followed by 29.91£. Given the significant upward movement the stock has experienced, it’s reasonable to anticipate some profit booking in the near future, which could result in a minor decline in its price. Observing the market activity, it appears that buyers have become less active since the stock reached its recent high. This might indicate an upcoming phase of profit booking. It’s advisable to avoid entering the market unless the stock successfully surpasses its current high at £35.4.

An hourly chart confirms the negative view on the stock. Selling volumes have drastically increased since the stock made its high and even the current setup looks highly bearish. 

The stock is currently at a level of £33.58 and it took a jump from this same level previously. If the WTB stock is unable to sustain here, a further downside till £33.06 can be expected. The next downside target after this stands far below at £31.8, which is also achievable, looking at the current setup.

The stock also faced a rejection from the 50 and 100 EMAs, further confirming a downside. 

The next few days are highly crucial for the stock because if the current levels are not sustained, a big breakdown can be expected.

Conclusion

The stock has been highly bullish this year but buyers currently look weak and after such a huge rally, profit booking is expected. The current setup looks highly bearish for the stock and as long as the prices do not settle down at comfortable levels, investors must stay away. If the stock touches £31.8 and sustains above it, then those can be considered good entry levels, provided there is a high buying volume and a strong confirmation. The stock will start becoming weak if it slumps below these levels.

Important technical levels

Major support levels: 33£ followed by 31.8£.

Major resistance levels: 34.1£ followed by 35.4£.