What chance a banking sector recovery?
With the banking sector still on the ropes, our chartist considers the outlook for a near-term recovery.
19th August 2019 10:24
by Alistair Strang from Trends and Targets
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With the banking sector still on the ropes, our chartist considers the outlook for a near-term recovery.
Banking Sector (FTSE:NMX8350)
It's been nearly a year since we last irritated ourselves with a look at the clown farm, the banking sector.
Unsurprisingly, it did NOT escape from trouble, it achieved our initial drop target, and now is closing (finally) on our secondary target, the point at which we hope for a rebound.
Or will it?
The immediate situation is of weakness below 3,360 is still indicating the potential of 3,236 and hopefully a bounce but we're pretty concerned.
A break below 3,236 shall move the index below the long-term red uptrend and suggests the potential of 3,078 making a guest appearance.
This would tend to be a jolly poor show as while there will be hope for a bounce as the index meets the lows of 2016 and the Brexit vote, the impact of breaking the uptrend since the banking crash of 2009 will easily allow a third target level to make an appearance, a completely absurd looking 2,460.
To be honest, it's not as absurd as a major attraction below red calculating at just 320 points. Obviously, an utterly silly number as we can surely trust the banking system...
In the interests of fairness, there's quite a lot arguing for a recoil if 3,236 makes an appearance and it's certainly getting close to this target level.
If any strength is indeed evident, it could bounce anytime soon.
This being the case, movement now above 3,467 should prove capable of a market lift to 3,529 points. If exceeded, secondary calculates at 3,840 and a coming challenge of the downtrend since 2008. We're not inclined to any optimism over this scenario, just yet.
About the only conclusion we draw suggests some misery remains within the retail banking sector but there appears a chance of some recovery soon. We can hope!
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.
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