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Associated British Foods On the Rise?

Associated British Foods is a diversified international food, ingredients and retail group which operates in 53 different countries. They have a purpose of providing safe, nutritious, affordable food and clothing that is great value for money to its consumers. Their company is split into five main segments which includes: Grocery; Sugar; Agriculture; Ingredients and Retail.

Over a five-year period, Associated British Foods have seen some negative share price performance by approximately 15%. This indicates that they are in a downward trend and have been over a relatively long period. They currently have a market cap of approximately 18.6bn with a P/E of approximately 46x.The past year they have increased by approximately 19% which demonstrates some strong resilience of their company in a very difficult period fuelled by the ongoing pandemic. As the end to the pandemic is beginning to look more promising it is now an interesting time to look at companies that may outperform in the post pandemic period. The chart below is a weekly chart of Associated British Foods which is demonstrating some interesting levels around the current level.

The current price is trading just above the 38.2% Fibonacci level indicating some support around this region. There is also an upward trending level which is the support of the ascending channel. This creates a confluence of support indicating a potential upward movement in the price. It should be noted that the underlying trend is downward. If the price does continue to rise we could see a possible move to the upside toward the resistance trend line of the descending channel. From there it will be interesting to see if the price breaks the level or falls back down within the channel. Certainly one to watch with interest.

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