Barclays: brace for turbulence?
Independent analyst Alistair Strang thinks that while the retail banking sector appears to be recovering, he's a little nervous at the potential for some near-term turbulence.
16th December 2024 09:14
by Alistair Strang from Trends and Targets
With Christmas just over a week away, we’ve a few reasons to spoil any Christmas spirit. It’s all to do with market indices, which are approaching logical highs, a point in time at which we tend to anticipate some hysterics.
Some markets have already started to display some hesitation. The Dow Jones, for instance, has a logical “high” target level calculated at 45,135, and with the highest recently achieved being 45,074 points, there's a reasonable argument that this high was “close enough”.
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The problem comes when we review other markets such as Germany, the S&P, even the UK FTSE, as they are all approaching theoretical market highs.
Our concern about the markets reaching a “logical high” level is oddly backed up with Barclays (LSE:BARC). Their share price, while looking quite energetic from a big-picture viewpoint, is also looking slightly fraught with danger.
The immediate issue suggests movement above just 272p should trigger improvements to an initial 279p. This brings the share price to a level last seen in 2015 but, from a closer viewpoint, we anticipate 279p as being an issue. The reason being movements during 2024, following the break of the blue downtrend since 2008, calculate with a logical high at 279p, presenting a point at which some turbulence is expected. This detail bothers us, due to markets all suffering such a potential fairly soon.
Source: Trends and Targets. Past performance is not a guide to future performance.
The big question, obviously, is will this occur before the inauguration of Donald Trump on 20 January or after?
But should 279p be exceeded, we can calculate a secondary ambition at 312p, now challenging the highs of 2013.
While the retail banking sector appears to be recovering, we're certainly getting a little nervous at the potential for some relatively near-term turbulence. But Barclays now needs to close below 234p to spoil our calculations, so there's currently plenty of room for manoeuvre.
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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