What Lloyds Bank shares must do to keep rally alive

22nd March 2022 07:32

by Alistair Strang from interactive investor

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Lloyds has been one of the strongest UK banks in recent months, but can it maintain momentum? Independent analyst Alistair Strang gives his view.

Lloyds Banking Group (LSE:LLOY) indulged in a little dance step at the open of trade on Monday, surging up to the dizzy height of 49.53p, 30 minutes after trading commenced. To sane people, this little nod upward would have been pretty meaningless but to us, the movement tended suggest exactly where the trend is with the retail bank, and this is generally a pretty big deal.

From our perspective, it’s as important as your opponent in a card game accidentally laying their hand down face up, always a disaster during our lunchtime tournament of ‘Snap’.

Source: Trends and Targets. Past performance is not a guide to future performance

However, the harsh reality at present is of a marketplace showing signs of extreme nervousness, a distinct hesitation among many shares to risk starting a new trend.

Even the immediate downtrend for Lloyds, a line which appeared at the start of last month, looks perfectly capable of inhibiting any near-term positive steps. It’s creating the immediate situation where weakness below 48p risks entering a reversal cycle to an initial 39.7p, an inconvenient number but not particularly dangerous.

The problem comes, should 39.7p break, as further reversal to 33p feels exceedingly possible, but we’d hope for a rebound if such a target makes an appearance.

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.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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