August 10, 2010 / 12:28 PM / in 10 years

STOCKS NEWS EUROPE-Next weak; Galvan "sell into strength"

Shares in Next (NXT.L) shed 1.2 percent, underperforming a 0.7 percent decline by Britain's FTSE 100 .FTSE index, with Galvan Research seeing the stock as a "sell into strength" backed up by technical factors.

“Shares in Next gapped down sharply on August 4 and since then have been unable to break back above the 200-day moving average now at 2,058 pence. While this remains the case there is a risk of a retest of this month’s intraday low of 1,974 pence during the rest of August,” Galvan says in a note.

Galvan says Next shares enjoyed a strong bull run on the back of the good times for the retail sector but now they face headwinds as consumer confidence wains and the imminent rise in value added tax in Britain to 20 percent approaches.

This, says Galvan, backed by the toppy technical picture, means “Next can be classed as a “sell into strength” quite safely from this point on.”

Reuters Messaging rm://jon.hopkins.reuters.com@reuters.net

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