Barclays: is its share price due a serious boost?

Our columnist argues that all it would take is a small nudge to kickstart a regeneration of the stock.

Barclays

Hopefully the share price of Barclays (LSE:BARC) is about to find itself seriously on the move, as we're mildly impressed with its impetus since our analysis three weeks ago.

Our interest relates to current share price behaviour. Barclays followed our recovery scenario, reaching our initial target of 181p and currently fluttering above and below this target level.

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Obviously this is fairly reassuring, as it tends to confirm we've been mapping movements using the correct table. It's what comes next that is a bit of a puzzle.

Previously, we speculated with an initial recovery target of 181p with secondary, if bettered, at 190p. With 181p exceeded, the scenario remains valid, but there's a pretty major issue thanks to Barclays’ share price before Covid-19.

The share experienced a high of 184p before the price was tossed off the pandemic cliff. It has now successfully closed a session above its pre-pandemic high on several occasions during the past week.

This creates the likely nirvana of ‘higher highs’.

When we review successful movements in other international marketplaces, this type of behaviour has tended indicate good times ahead. The upshot is we calculate potential from 181p to 190p is liable to become a very brief footnote in Barclays’ price behaviour.

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Instead, there appears a reasonable chance 190p shall be bypassed completely, with the potential of an attempt at 224p instead. Longer term, we can even calculate 289p as presenting a reasonable ambition, something which even makes a degree of visual sense.

On the chart we've drawn a dotted line which dates back over 10 years, indicating that historically Barclays tends to experience a problem around the 289p level. With closure above that it'd start to feel like the aftereffects of the 2009 financial crisis were finally diminishing.

For it all to go wrong for Barclays, the price currently needs to slip below roughly 145p, but visually (gulp) a degree of optimism appears possible for this UK retail bank. All it needs is the push of a finger, in the right place, at the right time.

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

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.