Is J D Wetherspoon Stock Setting Up for Another Breakout?

• The stock had a highly bullish start in 2023. It has given more than 50% returns till now!
• The stock reached a high at around £8 levels but has seen a constant sideways movement since.
• The current setup looks strong and we might see another big blow in the stock soon.

J D Wetherspoon plc is a pub company operating in the United Kingdom and Ireland. Tim Martin founded this company in 1979. It is based in Watford. It operates the sub-brand of Lloyds No.1 bars and around 50 Wetherspoon hotels.

The company looks strong and stable in terms of finances with a consistent revenue figure every year. Overall, the statements look highly stable and investment-worthy.

Technical analysis for the stock

The stock saw a major rally in February and March months. It touched a high at around £8. It was a major level for the J D Wetherspoon stock. The profit booking occurred at that level, leading to a slight negative movement. The stock has been trading in a sideways zone since. 

£6.34 to £7.5 has become an important zone. The J D Wetherspoon stock is in a safe region as long as it trades in that range. £6.34 appears to be a strong demand zone for the stock. The buyers have not let the price slump below that level even for once. Therefore, the chances for the stock to breach this level in the current setup are highly low. 

Both buyers and sellers are pretty active in the stock. However, technical factors indicate that the chances for an upside move are good. Indicators and price action both predict a further upside move in the stock. 

£7.32 is a strong resistance and the first target in case there is an upside. A big move can occur only if the stock breaks its current zone at £7.5. These can be good entry levels in the stock with £8 as the first target.

On the downside, £6.34 looks like a highly strong support. Chances for the stock to breach this level are less. £5.71 will be our next strong support if the stock breaches that level. 

An hourly chart shows a strong buying and recovery after the stock tried breaching its support at £6.34. Buyers currently look highly active and a further upside move may take place. The stock breached £6.80 levels with a strong volume giving confirmations of a bullish move. 

Levels around £7.32 can be a good entry for a swing trade with £7.71 as the target.

All in all, the stock looks like a good buy as of now. 

Conclusion

The current setup looks strong. Buyers are not letting the stock breach its support and that’s a big positive. The stock can turn out to be a good buy in the long run. However, you must enter at appropriate levels with proper confirmation.

Important technical levels: 

• Major support levels: 6.8£ followed by £6.34

• Major resistance levels: 7.32£ followed by £7.71