Interactive Investor

How Lloyds Bank shares can escape the 'zone of doom'

24th January 2019 08:37

Alistair Strang from Trends and Targets

Despite a decent bounce in 2019, there's more to dislike about Lloyds than our technical analyst prefers.

Lloyds Banking Group

The UK's retail banks appear united in their approach to Brexit. Not a single one gives a clue to what's coming! However, as Lloyds Banking Group's (LSE:LLOY) big picture chart continues to show, this is perhaps not the case…share prices are apparently stuffed.

We've a problem when near-term ambitions fail to come to fruition as it generally implies big picture forces are in control. 

For Lloyds, we must presently take the approach of expecting weakness to an initial 41p with secondary, if (when) broken at a hopeful bottom of 31p.

At time of writing, it's trading at around 57p, requiring above 61.25p to remove itself from the immediate zone of doom.

What happens should a miracle propel the price beyond 61.25p?

Continued recovery to an initial 65p looks confident. And if this initial target is exceeded, our secondary for the longer term calculates at 70p sometime in the future, a point where a visual glass ceiling awaits.

For now, there's more to dislike about Lloyds than we'd prefer, and it's quite easy to suggest keeping a weather eye on the price, just in case 31p makes an appearance. At such a level, we would expect a serious bounce.

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. 

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.