The Legal and General share price is up 2.27% today, which further consolidates the 1.7% gain the stock had on Friday, as investor sentiment on the London Stock Exchange improved on Monday.
The recent uptick seen in the Legal and General share price stems from the recently announced £4bn housing and regeneration deal signed with West Midlands Combined Authority (WMCA).
The deal will see Legal and General invest this amount in developing various kinds of housing, including urban regeneration, commercial and social renting housing schemes. This is part of Legal and General’s plan to build up to 215,000 new homes by 2031 as the company expands its housing investment portfolio.
This deal brings to life the project site, which has been lying fallow since 2001. The new homes will be energy-efficient, providing affordable tenures. The housing market in the UK is at red-hot levels, with home prices at record highs. The Legal and General share price could see significant uptick if investors view this and other such investments favourably.
The Legal and General share price target over 12 months sits currently at 347.83p, with 400p and 325p serving as the high and low price targets, respectively. The median price target gives the stock a potential upside of 35.44%.
Technically speaking, the recovery bounce comes off the 61.8% Fibonacci retracement of the price swing from the 9 May low to the 18 May high. The stock is now headed for a critical resistance which could determine if the 280p price mark is a viable upside target.
The decline from the rectangle pattern and subsequent price activity on the daily chart is evolving into a potential inverse head and shoulders pattern, with the trough of the “head” at 235.5 and the two shoulders formed from the 27 April and 19 May lows.
The uptick of the last two days is pushing towards a challenge on the neckline at 261.0 (15 March high and 18 May low). A break of this neckline completes the pattern and opens the door to a measured move that targets 280.6 (upper border of completed rectangle). To achieve this price point, the bulls must uncap barriers at 268.7 (14 February low and triangle’s lower border) and 275.0 (18 February and 24 March 2022).
Conversely, a decline below the 244.0 support is needed to provide access to 240.00/ 235.5, and 227.5 are additional downside targets for the bears if there is further price deterioration.
This post was last modified on May 23, 2022, 17:20 BST 17:20