Lloyds Bank: The very last straw

Lloyds Banking Group (LSE:LLOY)

It has been a month since we viewed this lot and it’s failed to do anything special. Perhaps the 4.44p width of movement has some deep meaning to some folk, but from our perspective it simply illustrated what a waste of time August was.

Unfortunately, we’d postulated 63.5p as a droop target and, not only have Lloyds Banking Group (LLOY) shares obliged, it has managed to slither below. Obviously, this means something and our software is now proclaiming a bounce point for the price.

Actually, it’s the same bounce point we’d mentioned last month; somewhere around 57.5168p mid-price apparently.

Of course, we always give some derrière covering numbers and, in the case of Lloyds, the very last straw for the next leg down should be trades below 61.52p – though in fairness it’s just about in the drop zone from a visual perspective, closing the 5th Sept against the ‘red’ uptrend [on the chart below], though to be pedantic, it did end the session a few 1/100th of a penny below.

Worse, there’s another issue if 57.5p actually does make an appearance. We shall commence viewing Lloyds as a share achieving lower lows and probably feel the need to mention 50.5p as possible for a real “trampoline” bounce.

To escape this mess, the share price requires bettering 66.85p currently, the blue line on the chart.

So, now all the good news is out of the way, what does the immediate future hold?

We’ll pretend the share closed the session above ‘red’ and assume some sort of bounce is viable. This being the case, the immediate situation suggests anything capable of bettering 64.2p should attempt 65.25p which, if bettered, ticks the first box for bottom being “in”.

Then things get a little curious, thanks to all the opening second manipulation gaps the price has suffered. Apparently, above 65.25p means we should express optimism in the direction of 66p, but the price could easily find sufficient oomph to accelerate to 68.5p and beyond.

For now, though, we suspect 57.5p shall probably give some sort of bounce in the fullness of time.

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, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. 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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