Are Barclays shares about to break higher?

As the FTSE 100 signals movement into relative safety, we look at recovery potential for this lender. 

We've never experienced movement on the markets quite like those currently. It's not just a UK Brexit thing, irrational and illogical appears the order of the day throughout Europe and the USA. 

We're asked, almost daily, "are the markets about to suffer a correction?" For quite a while, we were confident this was going to be the case but, in the last few days, the FTSE 100 managed to stagger above 7,384 points. This is supposed to be a key signal of movement into relative safety.

We're not sold on the prospect of continued growth on the FTSE and, equally, we're now less convinced things are about to fall apart. 

When last reviewing Barclays (LSE:BARC), we postulated 157p as a target, along with a return to relative safety. On 13 September, it finally achieved our 157p, actually with a day high at 157.12p. Before becoming too excited at our target being bettered, the day high was achieved 14 minutes before the end of day bell. 

Worse, the share price rapidly receded as if scalded, spending the next few weeks just messing around messily. It results in the situation where we're nervous. Our target was minimally exceeded, and we're not sold on the prospect of 0.12p being relevant.

• Are Barclays shares about to rocket?
• Signs of optimism for Barclays shares

The situation now is slightly interesting as above 154.5p is supposed to generate recovery to 161.6p next. If bettered, secondary calculates at 177p along with very probable hesitation. There is, however, another factor to consider.

As the chart insert shows, once Barclays hit our 157p, the price retreated and, in the period since, assiduously remains below ‘blue' on the chart, the ruling downtrend since 2018. This is not a great signal as the price remains solidly in a zone with 112p exerting attraction. 

Currently, below just 144p suggests weakness coming to 136p next. If broken, secondary is at 112p and "hopefully" a proper bounce.

We're vague in drawing conclusions, simply because the markets are not giving a sense of true direction. Things could break upward, just as easily as they could break downward. 

Source: Trends and Targets      Past performance is not a guide to future performance

An example of how ludicrous things are, came from gold. Last night, we'd given a "slow" drop target at $1,464, not really expecting it anytime soon. At present, gold is supposed to be a useful contra indicator for the index. As folk who follow gold will note, it broke our $1,490 trigger and bounced at $1,464 on a day the index' were mucking around doing nothing positive.

Go figure!

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea.