The big question for Lloyds Bank shares

Analysis has identified a possible ‘bottom’ for the Lloyds Bank share price. Will the market find such a number irresistible?

The retail banks remain the politicians of the stock market. As in, they don't actually do very much but do cost a lot of money!

Lloyds Banking Group (LSE:LLOY) remains a case in point. Our previous report suggested its price only required a slight nod upward to start some recovery. For three weeks the share has wallowed in the gutter and now is at risk of some reversals.

• Lloyds Bank: where will the stagnant share price go?

The situation for Lloyds remains the same. The share price only needs to exceed 30.9p to suggest a coming recovery toward an initial 34pm with secondary, if exceeded, at 35.75p.

If triggered, the tightest stop loss level looks like 28p. In fairness, we shall be fascinated if the market discovers an excuse to ‘gap’ Lloyds up above 30.9p at the start of trade as it shall become likely a cycle toward 50p will commence.

Of course, there's a massive ‘however’ here, thanks to Lloyds’ share price closing on Friday at 25.8p. By taking this stance the market has allowed the bank to close in the land of 'lower lows', the share price now visiting levels not seen since 2012.

In doing so, price moves have created a situation where below 25.8p has the potential of weakness to an initial 24p, with secondary, if broken, now at a really surprising price level.

Both our big picture view, along with our calculations for the current year, point quite separately to 22.35p becoming a ‘bottom’ for this retail bank!

We don't entirely understand why this is the case, but when two quite different trading scenarios point to the same target level, the market usually finds such a number irresistible.

The big question, obviously, remains. If Lloyds Bank hits our 22.35p target level (in fact, ideally just above this level to imply residual strength) will it bounce?