Why Tesco share price could slump by one-third
31st December 2018 10:48
by Alistair Strang from Trends and Targets
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Tesco shares hit a multi-year peak in 2018, but 2019 might prove more of a challenge, according to technical analyst Alistair Strang who thinks a miracle is required here.
Tesco (LSE:TSCO)
Of the listed UK supermarkets, the one we dislike visiting is also the one with – from our perspective – the dodgiest share price position. Basically put, it’s at risk of losing a further 1/3rd of its value unless Santa has a surprise miracle in store.
In honesty, though, there is not a single supermarket which produces an enjoyable visit!
When we review price performance since the Brexit vote, Tesco share has broken trend and currently languishes in a zone where a visit to 166p next makes some sense. If broken, it should bottom around the 130p mark eventually which is rather distressingly below the level when the current ruling trend started. (Red on the chart)
It needs a miracle which permits the share price to close above red (200p at present) before we dare suspect a visit down to the 130's is off the table.
Perhaps worse, as we mentioned a month ago in our last glance at this unfolding disaster, the price has experienced a gap up/down (circled on the chart) with this particular set of manipulation often proving the precursor of some real damage to a shares price.
There is one final item.
Essentially, if we draw a trend since 1988 to present, then mark the 130p bottom target on it, this long-term uptrend matches the 130p level around April of 2019. This is literally days following the actual Brexit event, if such actually takes place.
We live in interesting times.
Source: Trends and Targets Past performance is not a guide to future performance
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