Here's a safe trading target for Lloyds Bank shares
Whether opting for a long or a short position, our chartist looks at the potential outcomes.
22nd May 2019 09:26
Whether opting for a long or a short position, our chartist looks at the potential outcomes.
Lloyds Bank (LSE:LLOY)
When we last reviewed Lloyds Banking Group (LSE:LLOY), we speculated it was probably about to get stuck in a trading range between 57.5p and 63p. Guess what?
Source: Trends and Targets Past performance is not a guide to future performance
In the period since our last analysis, the share broke our 63p trigger level, hit our initial 60p target (crucially breaking it on the first downward surge) and despite a low of 59.2p, Lloyds remains with the threat of a bottom around the 57.5p level.
It's proving painfully slow but is probably presenting a safe trading target, regardless of whether opting for a long or short position.
Regardless of choice, entering around the midway level in the 60p area, then waiting a while to take some profit, looks a viable strategy. For a long position, a stop can be placed around 56p, for a short position, a stop looks like 64p. As the chart shows, the difficult part of any trade looks like patience.
We're actually (a bit) surprised it hasn't hit the 57.5p level yet but for some reason, banking shares appear attuned to whatever Brexit music is playing politically.
If this is indeed the case, the big picture presently suggests 41p is exerting a long term attraction eventually, doubtless requiring the correct level of political incompetence to sufficiently damage the share price. Indeed, if the political will exists to really trash Lloyds share price, "ultimate bottom" now calculates down at 26p.
If we opt to assume the worst for the near term, apparently weakness on Lloyds now below 59.2p should drive the share back to 57.5p initially. We'd hope for a rebound at such a level but we must admit, we can now calculate a secondary at 56p.
Should we attempt a positive stance, the price requires better 65.3p to confirm a rise is possible, this triggering potential movement to 68p initially with secondary, if bettered, at a game changing 77p.
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.
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