Blue chips plunged last week, so our analyst looks for signs that Lloyds can bounce back.
Lloyds Bank (LSE:LLOY)
Retail bank prices behave like a cosmic practical joke. When we reviewed Lloyds Banking Group (LSE:LLOY) in January, we warned we'd need to review the tea leaves again if the price managed below 48p.
During Friday's traumatic session, Lloyds achieved 47.89p, thus forcing us to do some work!
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At first glance, Lloyds' share price looks pretty stuffed and, yes, weakness now below 47.8p will be regarded as entering a cycle down to an initial 42.5p with secondary, when broken, at a bottom hopefully of 31p.
However, there's a bit of a wrinkle with this argument and it's shown with the closing price insert on the chart.
It could prove to be quite important the market ensured Lloyds Bank's share price did not close below the trend, instead effectively closing at red, hinting at a coming rebound.
This being the case, it's perhaps important to point out the glaringly obvious. Until such time Lloyds share price recovers above blue, we dare not take any recovery seriously. At present, this particular stumbling block resides at 62p.
Near-term, above 53.3p looks capable of bringing an initial 56.25p. If exceeded, secondary calculates at 59.7p and visually collides with a glass ceiling which appears to have formed just below the 60p level this year.
There's certainly a strong argument favouring movement above 59.7p being taken as early warning for a future attempt at the banks share price breaking above blue, hopefully to enjoy some time in the sun.
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.
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