Is The Spirax Sarco Stock Heading Towards a Big Breakdown?

• After a big breakdown in 2022, Spirax Sarco stock has been constantly moving in a range between £121.35 to £98.34.
• The stock is at its lowest level in 2023 and still looks highly weak.
• If the current trend continues, we can expect a big breakdown in the upcoming months.

Spirax-Sarco Engineering plc is a British manufacturer of steam management systems, peristaltic pumps, and associated fluid path technologies. It is headquartered in Cheltenham, England. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. The financials for the company look highly stable with a constant revenue every year. Profit margins for the company have been positive but have seen occasional ups and downs. 

Technical Analysis of Stock

The stock has been highly volatile in 2023, but it has respected its range. It has not been able to break out of that range. The stock has seen a sharp selling in the past few days. Consequently, it traded near a very strong support at £98.14.  Sellers are currently pretty active in the stock. If the stock does not hold above the current support, a big downside can be seen. The next target post the current levels stands at around £91.30. 

If the stock does sustain above £98.14, we can expect a slow recovery. This level has been a good demand zone for the SPX stock.  Even if the stock shows a recovery, a good buying level is not anywhere close. Thus, a continued range-bound movement can be expected.  A good buying can be made if the stock crosses the £121 level, which is far away from the current trading price of the stock.

An hourly chart confirms the negativity in the current setup. Volumes have been highly low, resulting in a sideways movement. Sellers still have a stronger hold on the SPX stock. It is resulting in a constant negative movement.  The stock is currently giving strong selling confirmations. It is supported by most of the technical indicators too. £98.14 is currently the key level to watch out for. As long as the stock trades above this, we can expect some recovery. If there is a breakdown, £91.30 levels can be seen very quickly. Analysts too have a flat view for the stock with a target price of £121 in the upcoming year. Thus, any entry must not be made until the stock breaches strong supply levels in the future.

Conclusion

The stock currently looks negative and a big breakdown can be seen if the current levels are not held. Traders should watch the stock closely. A good entry below the previous low is possible until the next support. For investing purposes, it is advised to stay away from the stock for a few months.

Important technical levels:

• Major support levels: 98.14£ followed by 91.30£.
• Major resistance levels: 109.38£ followed by 115.73£.