Both smokers and investors use tobacco to calm their nerves in times of anxiety.

So, while the UK stock market was losing around half of its value during the 2000-03 slump in equities, Imperial Tobacco’s share price more than doubled. Of course, the sector is not entirely immune from stresses elsewhere, as the recent sell-off underlined. However, this may have created an interesting opportunity for traders to take up the habit.

At present, Imperial and its competitors remain under attack from the spread of anti-smoking laws across many of their most profitable markets. But the industry has so far coped well with this challenge. Reflecting this, share-price valuations among tobacco firms have continued to rise in recent years.

After a brief but dramatic collapse in January, Imperial’s share price first rallied and has since been trading sideways. It has built a base on top of a horizontal level at 2314p and its 200-day exponential moving average. Over the past 10 years or so, buying into the stock when it has traded around the latter has frequently turned out to be profitable.

The next challenge for Imperial is to overcome its 21 and 55-day moving averages, currently at 2399p and 2443p respectively. The top of the daily cloud is at 2455p. Thereafter, the targets are 2667p and the all-time high at 2777p.

The risk here is that recent action is merely a counter-trend rally and that the larger “fourth wave” correction will resume, dragging the shares down towards 2150p.

A Friday close below the 55-week exponential moving average (currently at 2302p) would be bearish.