This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Technical Observations – For
Technical Observations – Against
Clear falling channel since beginning of year. Shares turned over at ceiling of falling channel. Equity markets are back fretting about global trade, uncertain about a US-China detente. A hard Brexit could hurt UK banks. A pause in US interest rate rises, and a delay before Bank of England hikes because of Brexit, may limit banks’ upside.
Risks to HSBC shares include a general market rally that favours risk asset such as Banks; a resolution of US China trade dispute, given the bank’s sensitivity to Asia; an increase in interest rates (UK or US) boosts the bank’s profitability (charge more to lend than pay on savings); a soft Brexit could see a sector relief rally.
Consensus may be Neutral/Bullish biased, but there are still 10% of brokers saying Sell. Clear downtrend offers a short term trading opportunity until shares deliver a meaningful breakout. Furthermore, 16% of broker targets suggest downside from current levels and 32% have a target no higher than our suggests stop-loss.
Next Event: Brexit deal vote, Tues 11th Dec; FY Results, 19 Feb
Latest Broker 12-Month Consensus: 37% Buy, 53% Hold, 10% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg, Company Press releases, AlphaTerminal
| 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr | |
| Perf % | -1.4 | 2.7 | -2.0 | -9.2 | -9.4 | 5.9 | 26.8 | 5.7 | 0.6 |
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Prepared by Michael van Dulken, Head of Research