Lloyds Bank: is now the right time for a rebound?

by Alistair Strang from Trends and Targets |

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The bank's stock could bounce back if optimism about the post-Covid future continues.

Lloyds Bank

It's funny how the glaringly obvious can sometimes trip us all up. We mentioned in our last report that should the share price of Lloyds Bank (LSE:LLOY) reach 26p, in our opinion it would provide an excellent point at which to catch a bounce.

We also complained at the speed of movements, and wondered if there was any chance of the price ever getting there. This now appears extremely unlikely, so for those holding their breath we'd suggest (almost) forgetting the potential.

Lloyds’ share price has finally exceeded the blue downtrend, still not bursting with optimism, but a severe drop looks rather less likely.

Instead, the share has once again tangled with our 38p trigger level, again forcing us to wonder if happier times are ahead.

The arguments are starting to pile up. There are fewer Covid-19 deaths, reduced infection rates, lots of speculation regarding easing lockdowns and school return dates mentioned.

Thus far, the added benefit of vaccines gives a lot of hope for a return to something approaching normality. We wonder if vaccine passports shall become the norm in the hospitality industry in the year ahead, despite the Government rejecting the idea?

For Lloyds, if we regard all this as glaringly obvious, an improvement in their share price (almost) must happen, and visually above 40p now looks key.

In such an event, price recovery toward an initial 45p is now expected with secondary, if exceeded, at 50p. We can calculate the potential of 55p as a third level target, suspecting this may prove an issue.

Prior to everything hitting the Covid-19 fan in February 2020, there was some sort of issue going on between 55p and 60p. This makes us strongly suspect a big picture glass ceiling awaits, should such a level make itself known.

If everything intends go pear-shaped for Lloyds, the share price now needs to close below 36p to justify panic.


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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