Interactive Investor

What will Tesco food price hikes do for the share price?

23rd March 2023 15:31

by Alistair Strang from Trends and Targets

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With the shares up 20% in the past six months and near levels last seen in August, could Tesco even recover to 2014 prices? Independent analyst Alistair Strang gives his view.

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There can be little doubt UK grocers are guilty of profiteering at present, something anyone who’s been involved with retail will know. Even Lidl, while issuing a robust response to the accusation, failed to offer any defence to their price rises when presented with examples.

With Tesco (LSE:TSCO), given their position as one of the leading profiteers in groceries and fuel, common sense demands we should anticipate continued record profits for the company, presumably with commensurate gains in the company's share price.

After all, “hope” tends prove to be a powerful aphrodisiac for traders who’ll cheerfully assume happy days are here to stay.

The immediate situation allows a scenario where Tesco exceeding 264p should now trigger price growth to an initial 280p, with our longer term secondary, if bettered, at a future 312p and price levels not seen since 2014.

This game plan should be fascinating, even allowing for a third target level of 346p should Tesco prove sufficiently strong to close above the Blue downtrend.

For everything to go wrong, Tesco share price needs below Red on the chart as such a situation makes reversal to 135p exceedingly probable.

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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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