Liv-ex adds new technical tools to predict prices

Liv-ex has added a new technical analysis tool to enable its members to examine historic wine prices to try to forecast future movements.

The new Technical Analysis Tool, which has been launched to Liv-ex members in the last week, gives a visualisation of the wine’s price over time thereby enabling them to conduct their own analysis more easily.

It has been developed over the last six months by an independent freelance technician with accepted technical analysis techniques overlaying Liv-ex’s existing data. It includes a number of tools which help predict when a pullback if likely and at what level to take a trading target, establish how volatile prices are at the moment, and whether the trend will continue or reverse, and measures the magnitude of price movements, based on average gains or losses over a given period.

“While such analysis offers no guarantee, it can provide reliable pointers towards the likely direction and timing of future price changes,” Liv-ex said.

In an accompanying blog post, the fine wine company noted that increase in fine wine rarely takes place in a linear fashion, and there are numerous external factors, both macro and micro in nature, that affect fine wine prices on the secondary market, but observations of the market and recognising repetitive patterns in a data series could provide reliable pointers towards the likely direction and timing of future price changes and thereby improve the probability of successful trading decisions.