nlh7388

Has sentiment at #LLOY improved?

Long
LSE:LLOY   LLOYDS BANKING GROUP PLC ORD 10P
Hello traders

This analysis is following up on my previous idea, which can be found in the link below.

I thought I'd give some clarity on where the price could go, following the board's earnings release.

I have included two Fib retracements. Firstly, from the ~67p peak last year to the low mid Sep at ~23p. This gives us a broader outlook of where the price has been, and where it could go long term. Secondly, and the most critical in question, a retracement Fib from 39.5p resistance of 24 Nov 2020, to 33p support of 29 Jan 2021. This gives us a clue on where the price can go short term.

On the day of earnings release, the share price opened with a gap up, but eventually closed below resistance. Currently, the share price is using the 0.786 Fib level as support. The next few trading days will tell us more. I don't expect the price to fall below said Fib level, if it does, it would be interesting to see if the 20SMA acts as support. More importantly, if price closes above 39.5p, this will be the highest in over 11 months, and would see a bullish ascent.

The company released earnings a couple of days ago. Due to the pandemic, all stakeholders are aware that profits will fall dramatically. Question is therefore, are they better or worse than expected? Lloyds stated profits falling to £1.2bln which beats consensus. Additionally, the bank's core capital ratio increased to 16.2% compared to 15.2% in September. This is a key measure of financial resilience.
A final dividend of 0.57p per share has been announced. This is the max permitted following rules by the BoE.

For me, reasons to go long are clear, especially with an end to lockdown in sight, enabling the economy to open up again.

Let me know of your thoughts, if you disagree with me or otherwise, or if you want further information. I'll do my best to help.

Please follow me and give me a like, that would help massively.
Thank you.
Comment: Thought I'd give an update following yesterday's movement.

We can clearly see a breakout of the resistance zone. This should now be the support area but technically we haven't had confirmation of this (i.e. price closing around new support). For now, the price is still following the uptrend from 29th Jan 21.

So where will the price go you ask? Short term let's aim for the 1.618 Fib level.

Feel free to comment, follow and like, thanks :)

Related Ideas