A fresh forecast for Barclays shares

UK banks have avoided flamboyant movements since the Covid-19 drop. Our chartist hunts for a positive catalyst.

Barclays (LSE:BARC) 

Such is our confidence in market direction, we are opting to take a weekly review of the two leading shares in the retail bank sector in the hope of getting a clue on what's happening.

Unlike Brent crude and gold, the banking sector has tended to avoid flamboyant movements since the Covid-19 drop, so we hope it shall prove a bellwether (the leading sheep in a flock) for future market direction.

The cunning plan is to try and identify a near-term movements, capable of triggering a big picture movement.

Unfortunately, the downward spike at the open of business this week for Barclays (LSE:BARC) does not feel capable of giving fireworks, instead probably just keeping the share price messing around to convince the market it's trading.

This strategy tends to accomplish very little, other than to give a feel for change in market direction.

What is utterly key is the signal given, if one of our near-term movements is substantially bettered. This sort of thing can often imply the first real signal for shift in market trend.

On an immediate basis, apparently moves next above 117p should provide a climb to an initial 119p with secondary, if exceeded, calculating at 122p.

As the chart below highlights, neither ambition is particularly useful in itself, the price not being lifted into the land of higher highs. Instead, such a gain just keeps the share price marching on the spot.

Normally, a spike down on a price at the start of a trading week should give some hope, but in the case of Barclays, we're not sold.

The price only needs to drift below 111p to suggest coming weakness to an initial 107p with secondary, when broken, working out at 98p and hopefully some sort of rebound.

The bigger problem comes should the share close below 98p for any reason as best hope for a bottom works out at 83p.

Next week, she shall review what is happening with Lloyds Banking Group (LSE:LLOY).

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.