This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Currently back trading around 4-year lows, one can’t help entertaining the possibility that the early 2016 bounce may simply have been consolidation and the unwinding of short positions – a short term uptick likely to be followed by further downside. While the technical indicators are oversold, a drop off in momentum may serve to dampen (to put it lightly) the bullish spirit of those who hear UK bank’s shares screaming ’buy me, I’m at a four year low!’
Fundamentally, the banking sector is looking really rather beaten up. A potential saviour in higher central bank interest rates does not look to be forthcoming and now that the Bank of England has tightened the thumbscrews with tighter regulation and a fresh set of stress tests in 2016, not to mention getting everyone even more worried about Brexit, we see downward pressures remaining.
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Do you think shares in Barclays will rally up to the highs of 340p or fall beneath the lows of 147p?
Consensus remains bullish, and while 100% of target prices are above current levels we note that they’ve been steadily decreasing since end-Jan. Also, investors have likely been encouraged by advisors to cling on for the 4% dividend yield to which management took the hatchet earlier in March. At Accendo Markets, we don’t tell you what to do.
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