Shares in interdealer broker ICAP shed 3.3 percent, the second biggest FTSE 100 faller, with the index down 0.2 percent, extending recent declines following poor news from the financial sector, with CFD specialist Galvan Research and Trading calling the stock a “momentum sell”.
Galvan notes that in the wake of a badly received trading update from Barclays , notably disappointment at its Barclays Capital broking arm, and the collapse of broker MF Global on Nov. 1, sentiment among financial stocks has taken a hit.
“Galvan Research currently views ICAP shares as a momentum sell in the wake of this week’s price action gap to the downside and after the blow to sentiment and earnings forecasts in connection with the MF Global collapse,” says Andrew Gibson, Head of Research at Galvan.
The broker notes that ICAP shares have gapped down towards year lows near 380 pence, with the implication that there is fresh downside momentum while the 10-day moving average on the daily chart caps the stock.
Galvan sees the floor of a 2011 price channel towards 350 pence as a target.
ICAP shares have dropped over 13 percent in the week so far.
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