1) Lloyds Banking Group (LLOY)

You may be reassured to hear that Lloyds shares are still in an uptrend from their late 2011 lows! That’s great if you bought them back then, but the shorter term chart tells a different story with the UK’s bailed out bank fast giving up the (last ditch?) gains it made post 2015 results. The bounce off rising support just above 55p was encouraging, and it may well hold again if shares pull back once more towards it. But what’s rather more apparent are the converging trend lines on the longer term chart above (left).

LLOY; 5 year, weekly  

LLOY; 16 month, daily

The YTD low of 55p served as the third touch on the line of rising support and indicates a potential 6-year bearish rising wedge pattern that could threaten the integrity of Lloyds Banking Group’s longer term uptrend. This means current price action around 70p and the100-day moving average is key. A break above would encourage bulls looking for a continued recovery back to May 2015 highs of 90p, while shares remaining below this level could see them lose momentum, filling the 25 Feb gap and possibly falling further. Such a pullback can of course be capitalised on with CFDs, which are explained at the end of the report should you be interested.

Do you think Lloyds Banking Group shares will rally back to the highs of 90p or fall back once more to the lows of 55p?

Broker Consensus (Source: Bloomberg, 31 Mar)

Brokers are still bullish on LLOY, with 90% of those covering the stock saying either ‘buy’ or ‘hold’ and 95% of target prices above current levels.