Investing 10-11-2022 12:40 8 Views

Abrdn share price forecast after staging a strong recovery

The Abrdn (LON: ABDN) share price has staged a strong recovery in the past few weeks. It rose to a high of 180p, which was the highest level since June 8 of this year. It has jumped by more than 37% from the lowest level this year. 

Abrdn short interest rises

Abrdn, formerly known as Standard Life Aberdeen, is one of the biggest financial services companies in the UK. It is a fund manager that provides its services to institutional, intermediary, and individual investors in the country. 

Abrdn offers services like investment funds, closed-end funds, international wealth management, and fund solutions among others. 

The company, which has evolved to become a fallen angel, has been facing numerous challenges lately. For example, its outflows have been in a strong downward trend. The most recent results showed that its net outflows in the first half of the year was £35.9 billion. It now has over £508 billion in assets under management, as I wrote in this article.

Further, the company has struggled with profitability, suffered from an extremely expensive acquisition, and paperwork challenge in Luxembourg. Most importantly, the company was recently booted from the blue-chip FTSE 100 index. 

Meanwhile, many investors have sold the shares short. The most popular short-sellers are Ken Griffin’s Citadel and Steve Cohen’s Point72. Data published by the Financial Conduct Authority shows that it is the fourth most shorted company in the UK after Boohoo, Asos, and Naked Wines. 

Further, there are concerns that the company’s three-year turnaround strategy is not working out well. Also, the firm has significantly high fixed costs and there are concerns about its acquisition of Interactive Investor. 

The recent Abrdn share price rebound is likely because of investors who are buying the dip. Another possible reason is that it is in line with the ongoing recovery of global stocks. Further, some investors believe that it is an incredibly cheap company, whose sum of parts is worth more than two times its market cap.

Abrdn share price forecast

The daily chart shows that the ABDN share price has made a strong recovery in the past few weeks. As it rose, the stock managed to move above the important resistance level at 169.70p, which was the highest level on August 15. 

The stock has risen above the 50-day and 200-day moving averages while the MACD has moved above the neutral point. Therefore, the stock will likely rising as buyers target the key resistance level at 200p. A drop below the support at 169.70p will invalidate the bullish view.

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