Aviva and peers see share prices rebound after ‘Black Monday’

The British insurer saw its shares tumble along with other UK stocks after ‘Black Monday’, but Aviva and its European peers have found support on Tuesday.

Aviva saw its shares fall close to 10% on ‘Black Monday’ – the UK stock market’s worst day since the 2008 financial crisis – as equities slumped amid fears of a global economic slowdown and the impact of the coronavirus outbreak.

However, the stock rebounded along with the broader market on Tuesday, with Aviva up 4% and the FTSE 100 climbing 3% higher.

Aviva is trading at 323p a share as of 12:10 (GMT) on Tuesday.

Aviva wasn’t the only insurer to find support on Tuesday, with European rivals like ASR Nederland, Helvetia, Baloise and Prudential all climbing more than 2% higher.

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Aviva: technical analysis

Much like the wider market, Aviva has seen a ramp up in volatility over recent weeks, with the stock market slump providing a move into the confluence of trendline and Fibonacci support, according to Josh Mahony, senior market analyst at IG.

This monthly chart provides us with an interesting wider view, where the decline seen over the past two-years looks like a retracement of the £2.47-5.04 rally. With that in mind, the ability to remain above this 76.4% Fibonacci support level (£3.08) is important as we attempt to stabilise within this 11-year uptrend.

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Rather more worrying is the very long term downtrend, with the 2018 peak having occurred at the 61.8% Fibonacci resistance level of £5.01. It will be key to watch whether we see this stock hold up or break below the trendline and Fibonacci support level around £3.08. A break below that region could point towards a move back into the £2.47 low to mark the end of this 11-year uptrend.

On the intraday charts, we can see a sharp decline from Thursdays peak of £3.71. That sharp decline is being retraced today, yet there is a good chance we will see the sellers come back into play before long. With that in mind, a bearish outlook remains in play unless we see price rise through the £3.71 peak.

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