Regency View:

TAKE PROFITS Warpaint London (W7L)

Close Warpaint London (W7L) at 311p

Mid-market makeup company, Warpaint London have been going great guns this year. The shares have powered higher – fuelled by a series of bullish trading updates and broker upgrades.

Whilst newsflow has remained strong, in recent weeks we have started to see signs that underlying price momentum starting to wane…

The Relative Strength Index (RSI) measures price momentum, and we are starting to see ‘negative divergence’ where the RSI is making lower highs despite price continuing to make higher highs.

This negative divergence is an early warning sign that Warpaint’s trend may be coming to an end. With this in mind, we are more than happy to crystalise our gains and wait for Warpaint’s trend and valuation to return to more sustainable levels.

Profit = 102% (including dividends)

W7L Daily Candle Chart