Does Barclays’ share price have hidden strength?

The bank will weather Covid-19, but there is no vaccine for Brexit.

Barclays Plc

We notice some of the retail banks appear to be anxiously shuffling their feet, perhaps in anticipation of some sort of ‘normal’ returning. Barclays (LSE:BARC) is one such bank.

In our last review three weeks ago we suspected the share price could wither from 146p down to 126p. Indeed, it withered upon breaking below the trigger but has bounced, fairly convincingly, from 130p.

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Does this imply hidden strength? We're not entirely sure, fearing a future where Covid-19 is less intrusive but which somehow forgets the Brexit pandemic is also causing a degree of havoc. To be blunt, we're uncertain whether the banks will be harmed or hammered. There is no vaccine for Brexit.

In the case of Barclays, presently trading around 147p, the share price now needs to exceed 151.5p to trigger something useful. In the event of moves next above this level, we hope for further price recovery toward an initial 160.5p.

This is liable to become fairly important, taking the share level above the blue line on the chart, the downtrend since it all hit the fan in February last year.

Visually, this looks like a big deal, breaking above the Covid-19 downtrend and creating an official ‘higher high’.

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The only thing left requiring investments in party poppers will be the share price actually closing a session above 156.5p.

A miracle like this, while giving a slight suggestion of some stutters at the 160p level, confirms our suspicion of hidden strength.  A longer-term trajectory toward 191p becomes easily believable.

To cause trouble again, Barclays’ share price needs slip below the red line (presently 134p) risking triggering reversals to an initial 128p, with secondary, hopefully, down at 112p.

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.