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Welcome to the first edition of Sunday Stocks, The Armchair Trader’s weekly look at what we think will be some risers and fallers in the week ahead. This week we will be missing a day of trading on the London Stock Exchange as Monday is a bank holiday in the UK.

We will not just be looking at the stocks we think will rise this week, but also some that might be worth either selling or shorting. For the time being we will just be focusing on the FTSE 100 universe of shares.

Turning positive this week

The stock we like the most going into this week is AstraZeneca (LSE: AZN). Investors in AstraZeneca shares will have already seen some gains as the stock has climbed from 5870 on 22 May to its Friday closing price of 6089. However we think there may be some additional upside from AstraZeneca this week.

There has been an ongoing discussion between traders and analysts on whether Astra Zeneca shares are still undervalued or whether the era of Big Pharma is going for good. Some investors still reckon there is some money to be made on Astra Zeneca stock.

Another stock we think could have some further ground to gain is Diageo (LSE: DGE). Diageo has been a little more rangebound over the past week or so, but keep an eye on it this week. We are not as bullish on Diageo as we are on Astra Zeneca.

GVC Holdings (LSE: GVC) has not been having a good month of it. GVC shares have slipped from around 667 to 587 at the close on Friday. The online gambling firm recently won conditional licence approval from the US state of Nevada, which has had some investors revisiting the stock. We’d consider it a cautious buy for the week ahead.

Turning negative this week

As for stocks that we think will fall soon: Rolls Royce (LSE: RR) is looking more bearish and may have a rockier time this week. Rolls Royce investors saw the shares take a dive last week, plunging from 940 on 20 May to their Friday close of 888. While this number might be lucky in China, we suspect there will be more bearish pressure this week as shareholders look for more reasons to get out of Rolls Royce.

Also on the short side of the trade book is Rio Tinto (LSE: RIO); Rio Tinto shares staged a bit of a recovery on Thursday, but the Armchair Trader sentiment around them is turning negative. We’d argue for some slippage this week, or at least a reversal of trend. The Rio Tinto share price has had a good run since the middle of May, but could run out of puff over the next few days.

The other stock to be cautious about this week is Spirax-Sarco Engineering (LSE: SPX). Again, like Rio Tinto, they have been doing well since the 13th, but we expect them to turn more negative this week.

That’s it for this week’s stocks forecast and analysis. We will be revisiting these shares in our follow up column on Friday; make sure you return to The Armchair Trader for regular weekly stock forecasts.

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

Stocks in Focus

Here are some of the smaller companies we are following most closely. They all represent significant growth stories in our view. Our in-depth reports go into more detail on why we like them.


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