Interactive Investor

Barclays shares: A fly in the ointment

With Barclays struggling to keep up share price momentum, our chartist searches for signs of hope.

1st May 2019 10:10

Alistair Strang from Trends and Targets

With Barclays struggling to keep up share price momentum, our chartist searches for signs of hope.

Barclays (LSE:BARC) 

We're tempted to tear up our rule book against the retail banks. Despite bank shares pretending to be interesting, share prices have backed themselves into a corner, resulting in a situation where either sharp reversal shall be required or, more probably, logical trends broken but prices becoming rangebound.

This was also our conclusion the other day when reviewing Lloyds Banking Group (LSE:LLOY), and there's nothing about Barclays (LSE:BARC) suggesting it shall prove different.

At present, the downtrend since June 2007, shown as blue on each chart, is at 168.49p. Normal rules demand a price close above this level before enthusiastically hoping for better times ahead.

Barclays currently exhibits some indication for a rise as theoretically, now above 165p is supposed to bring recovery to an initial 170.75p.

Movement such as this would give every hope the price shall close above the long-term downtrend, but the fly in the ointment - similar to Lloyds - is the presence of a "glass ceiling in waiting" around the 170p level, shown on the lower chart.

Visually, this creates a suspicion that, even with a trend break, Barclays intends to oscillate between the 170p level and the 155p level until something resolves Brexit issues. Only with closure above the 170.75p level will we dare succumb to hope, giving an initial 180p ambition with secondary, if bettered, of 192p. Or more probably beyond.

Until such time the share price manages a solid movement, while it languishes below 'blue' there's the threat of weakness below 159p driving the price down to 150.5p. Extreme danger is possible with trades below the 150p level, due to "bottom" calculating at 136p.
 
In the event anything interesting happens, we should revisit the retails banks and refresh our big picture perspective, sometime in June.

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. 

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.