After releasing underwhelming Q2 results, Lloyd’s (LON: LLOY) share price has been trading sideways since last week. The markets lost confidence in the black horse bank as the shares tanked by 7.5% after earnings. At the time of writing, the stock is changing hands at 42.8p.
The chances for a recovery in Lloyd’s share price are hampered by the recent rejection of the FTSE 100 index from its 200 MA. The index is currently sitting at 7,503. For Lloyd’s share price to see any meaningful upward movement, the FTSE 100 must show bullish momentum.
Lloyds Banking Group disappointed investors with its weak earnings report, sending its share price to a 4-week low. The bank also set aside £662 million to cover the losses it expects to incur from customers struggling to pay their mortgages due to rising interest rates and the cost of living in the UK. On Monday, Lloyds share price opened lower, and the candle turned green after a brief spike in the early hours of trading.
Lloyd’s recent earnings report showed a pre-tax profit of £3.9 billion, below the £4 billion average that analysts expected. The net interest margin declined to 3.14% from 3.22% in the first quarter. Lloyds management expects the net margins to decline further in the coming months.
I have repeatedly discussed the head and shoulders pattern in the LON: LLOY chart in my previous forecasts. The price is currently trading 4% down from the neckline of the head and shoulders pattern. At the end of July, the price faked a break out above the 44.6p neckline before plunging back below.
Lloyds share price forecast will remain bearish as long as it remains below 44.7p. To have any hope of moving upward, the bulls must first reclaim this level. Until then, the bearish target of 38p, which I mentioned in my previous analysis, will remain on the cards.
In the meantime, I’ll keep sharing the updated Lloyds stock forecast and my personal trades on my Twitter, where you are welcome to follow me.
This post was last modified on %s = human-readable time difference 12:37