Lloyds: Some reasons to be cheerful
With Lloyds back above its prior uptrend, our chartist sees if there are more good things to come.
27th February 2019 10:07
by Alistair Strang from Trends and Targets
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With Lloyds back above its prior uptrend, our chartist sees if there are more good things to come.
Lloyds Banking Group (LSE:LLOY)
Having achieved something thought impossible by returning above the prior uptrend, the Lloyds Banking Group (LSE:LLOY) share price now resides in the land of milk and honey, promising great things for the future. Apparently...
To get the good news out of the way first, the bank closed on 26 February at 61.9p. The red uptrend (see chart inset) is presently at 61.658p. Generally, when a share returns above a prior trend, we regard this as a good thing, suggesting happy days ahead.
For complex reasons, we just wish it had actually closed above 62p but, if we opt to suspend disbelief, movement now above 62.04p calculates as heading to an initial 65p. Our secondary, if such a level is bettered, calculates at a rather less confident 67.6p.
The reason for our hesitancy about reaching the 67.6p level is fairly simple. There's the presence of the blue downtrend dating back to the start of 2009. Only if Lloyds actually closes a session above this trendline (presently at 65.679p) does the share successfully remove itself from a region, where reversals to 41p, then 31p, and finally 21p are possible.
Our suspicion is that the market intends to trap Lloyds in a holding pattern until such time the word clarity can be used in the same sentence as Brexit.
For light relief, we've painted a thick green line on the chart, placed at the date Brexit is presently expected. Amazingly, it coincides with our initial upward target against Lloyds. This obviously means something, what exactly we're unsure.
As always, there's another side to the coin. Any reversal taking the price below 59.5p will signal it has all been a dreadful mistake with gloom once again ruling the day.
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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