Future looks bright for Lloyds Bank shares

Lloyds Banking Group (LSE:LLOY) is starting to show some signs of becoming interesting (along with other members of the financial sector), with a result we’re taking a “better late than never” stance, if only due to our target numbers changing.

There’s certainly some excitement, perhaps a bit muted, about Lloyds finally breaking the 50p level, even though the movement was carried out by a little bit of manipulation, the share price being gapped up from 50p to 51.1p as March drew toward a close.

• Invest with ii: Open a Stocks & Shares ISA | ISA Investment Ideas | Transfer a Stocks & Shares ISA

While some sectors of the financial press are positively drooling at this movement, one even inventing 70p as the next major target, our inclination is to rely on our software, as historically it has proven pretty reliable in mapping the retail banks.

Now above just 52.5p currently looks capable of triggering fairly near-term gains to an initial 55.5p and perhaps some hesitation given the share prices behaviour at such a level since 2022. Our longer-term secondary, if 55.5p is exceeded, works out at 60.5p where our logic demands witnessing the share price closing at such a level before being confident of a reasonable future. The 60.5p level is a big deal, marginally exceeding the high pre-pandemic, and only once the price actually closes above such a point does it become very probable happier days are ahead.

One mildly important facet of Lloyds' current movements is represented by the Blue line on the chart below. This Blue crayon mark shows a downtrend which dates back to the financial crisis of 2009 and, for some reason, the market appears to be currently treating it as important given price movements during the most recent seven sessions. We can argue closure around the 60.5p level shall be significant, suggesting the price has broken free from the gloom of the big market crash and the doom of the Covid-19 era.

This being the case, we can easily shift into “big picture” mode and suggest ignoring any pundits promoting the idea of a 70p target level. Instead, we are able to calculate 89.6p as a viable future ambition.

Of course, this is a retail bank, always at the mercy of politicians, economists, and others. As a result, below 50p shall now be viewed as dangerous, giving the potential of reversal to an initial 47.3p with our secondary, if broken, at 46p and a hopeful bounce.  

One other thing worth remembering, if you wake up during the next few weeks and the market as chosen to gap Lloyds down at the open for any reason, there is a reasonable excuse for some panic. But for now, we’re quite hopeful.

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