UK banks: what do the charts say after earnings?

Now that the big four UK banks have reported earnings, we look at the charts to see what the share prices may do next.

Royal Bank of Scotland

The Royal Bank of Scotland (RBS) shares reacted poorly to results, falling sharply to their lowest level since October. For now they appear to have stabilised above 204p, and a recovery back above 212p might help provide a more bullish impression. The shares have traded in a wide range of 178p–247p for three years, and further declines target 190p, the October 2019 low, and then down to the 178p support line that has marked the limit of downside since early 2017.

Lloyds

Apart from the December spike to 69p, the Lloyds share price has also traded in a range, in this case from around 47p to 65p. Since December, the share price has lost ground, and over the past month intraday rallies have been halted firmly at 58p-59p. Below 56p, the shares risk a return to 48p, the low from August, while a move back above 60p would help to reverse the bearish view.

Barclays

By contrast the rally goes on for Barclays, the bounce from August having added around a third to the group’s market capitalisation. Weakness into late January found support at the 100-day simple moving average (SMA) and 168p, and from there we have seen a steady recovery.

While the shares gapped down on results day, falling to 173p, the dip was swiftly bought, providing a much more bullish impression than that seen in RBS and Lloyds. The recent high at 181p looks sure to be challenged, with the way then clear to head to the December peak above 190p. Potential areas of support in the event of any downturn are 168p and 165p.

HSBC

HSBC shares have been in a strong downtrend since July, forming lower highs in September, December and now February (at £6.20, £6.00 and £5.95 respectively). However, the downward move continues to hit a floor for now at £5.50, with dips to this level resulting in sharp bounces.

If this breaks, then the April 2017 low at £5.30 comes into play, but then the price faces giving back more of the late-2016 surge. A longer-term view shows major lower highs since the peak in January 2018, so bulls have plenty of work to turn the share price around. Near-term upside targets £6.00, £6.20 and then on to £6.50. Any high below £6.50 risks reinforcing the post-2018 retreat.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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