CMC Markets (LON: CMCX) share price was the best-performing company in the FTSE 100 index after the forex and CFD exchange announced a new cost-cutting program. The stock surged to a high of 160p, continuing a recovery that started in December when it plunged to a low of 88.6p.
CMC Markets cost cutsCMC Markets and other forex and CFD brokers in the UK like IG Group thrived during the pandemic as most people remained at home. The past few years, however, have been brutal as trading volumes have dropped.
As a result, CMC Markets stock has crashed by over 68% from its highest point in 2021 while IG Group is down by 12%. Plus500 has dropped by 5% but is now nearing its all-time high of 1,950p.
It is against this backdrop that CMC announced a plan to slash costs in a bid to boost efficiency and profitability. In line with this, the company will shed 200 jobs representing about 17% of its total headcount. It will incur a cost of 2.5 million pounds in the current financial year and save 21 million in annualised funds.
Therefore, the CMC Markets stock price as investors predicted that the move will lead to better profits at a time when its business is slowing. The statement came a few weeks after the company published a better-than-expected trading statement.
CMC expects that its net operating income will be between £290 million and £310 million, higher than the previous estimate of £250 million and £280 million. It attributed this strength to its strong B2B and institutional business. The performance of CMC and other brokers will depend on how the market evolves this year.
CMC Markets share price forecast
Turning to the daily chart, we see that the CMC stock price has been in an uptrend in the past few months. It rose from 88p in December to a high of 151p on Monday when it made a god candle. A god candle happens when an asset makes a long bullish candlestick, often after a period of consolidation.
It managed to flip the important resistance point at 140p into support. This was an important level since it was the previous YTD high.
CMC Markets has also risen above the 200-day moving average, signaling that bulls are now in control. Therefore, the outlook for the CMC Markets stock is bullish, with the next viable target being at 186.2p, its highest swing on May 3rd last year.
The post Here’s why CMC Markets share price just formed a god candle appeared first on Invezz
