Hello and welcome to Cantos Charts. I'm David Jones, Chief Market Strategist from spread betting company IG Index.

I thought we'd start off by having a look at a company stock for a change and the one I've picked on is travel company Thomas Cook. I think it's got an interesting chart, but I think it is also an interesting one to look at this week anyway. On Monday of this week Thomas Cook came out with their latest results. Profits up by 46 per cent, well received by the market, initially at least anyway. It was one of the top winners on the FTSE 100 in early trading. On Tuesday we've got results from another sector stable mate from Tui Travel. So I thought the travel sector is an interesting proposition for this week.

Looking at the longer term chart for Thomas Cook, going back over the last couple of years or so we can see there we're in a fairly gradual but definitely marked decline. But I think we've broken the back of this with the rally that started in November last year. We've pushed up as high as £3 earlier this year. So for me that's breaking this downtrend. I have to say, since that downtrend is over, it's been a fairly uninspiring year for Thomas Cook. At the moment they're around about 30 per cent off their highs for the year, but maybe, now their results are out of the way, we'll see some fresh sentiment towards Thomas Cook. So I thought what I'd do first of all, if we just zoom in on the year so far because that's the bit I think that I'm really concerned about at the moment because there are some obvious levels to keep an eye on.

At the moment they're trading around about the £2.15, £2.12 sort of area. But for most of this year, from early January at least, whenever seen sort of weakness back into this whole £1.60, £2 area, which is a fairly big band, but whenever we've seen weakness back to here, we have seen the buyers come back out. We've got a little bit of a funny out print on the chart from last week. Of course, when all the Dubai news all kicked off we saw some quite exaggerated moves for stocks. So we saw Thomas Cook briefly down to £1.90 but then recover very quickly.

On the RSI down here we have this pattern known as bullish divergence where the market has moved to a low and then very briefly to a fresh low, but we've got higher lows on the RSI. So for me down here, now these results are out of the way and market sentiment is maybe inclined to be a bit more positive, I think the whole travel sector and Thomas Cook is an interesting one to keep an eye on over the next few weeks, next few months. Whenever we've down at this sort of level over the last six to eight months we have seen rallies. So for me medium-term target for Thomas Cook is for a run back up to those £3 highs from earlier in the year and I'd only start to worry about that as a trade or short-term investment if we saw a move back below last week's low. So a move back down to £1.80 would make me a little bit twitchy about that. But I think at the moment, any short-term weakness in Thomas Cook still looks to be something of a buying opportunity from here.