How Barclays' share price can avoid plunging into the abyss
11th December 2018 08:50
by Alistair Strang from Trends and Targets
Share on
It's going to need some sort of miracle for Barclays to dodge another savage drop, argues technical analyst Alistair Strang. Here's his forecast and the point at which the shares should bounce.
Barclays News (LSE:BARC)
That an incompetent UK government has (again) delayed the end of the world was quite a relief. Few things are more irritating than the world ending just before Xmas! Equally, for Barclays, their share price has not yet encroached on the danger zone and just moved inexorably closer.
All three retail banks have red uptrend lines which stretch back to their lowest price. Only Lloyds Banking Group commenced trading below red, something which accounts for the banks tendency to produce overdramatic movements.
RBS, quite amazingly, is a country mile away from its red line of doom, and Barclays' share price requires to close a session below 145.383p (at time of writing) to confirm a drop into the abyss. On Monday, the share closed the session at 153.36p.
We've ample reason to be nervous about Barclays.
At present, "normal" rules suggest it's heading toward 137p, a point where some sort of short-lived bounce is possible. If broken, our secondary calculation remains at 112p. Despite daring to apply the word "normal" against a retail bank, it's going to need some sort of miracle for Barclays to avoid 137p and a break of the uptrend since 2009.
This would rate pretty high on the "bad things scale", given below red on the chart remains with 78p exerting magnetic long term attractions. Barclays needs above 183p to get out of trouble.
There's a feeling of pretence about many price and index moves, everything feeling on the edge of doom.
The funny thing, market movements no longer give a clue as to which Brexit recipe is preferred. Regardless the politician, anything major about Brexit just appears give things a little nudge up and down.
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.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.