Lloyds (LON: LLOY) share price has been facing headwinds since the release of its recent financial results. The quarterly earnings showed a decrease in operating profits which increased the selling pressure on the bank stock. The latest technical analysis reveals that the shares are currently hanging by a thread.
The volatility in UK stocks increased today as the FTSE 100 index slid by more than 32 points. After a recovery, the index still stood 10 points below its previous close. Lloyds shares experienced strong selling pressure once again and were trading at a 1.07% loss.
According to the second quarterly financial results released on 25th July, Lloyds Banking Group had a decline in its underlying operating profit before tax. The figure came to GBP 1.82 billion as compared to last year’s GBP 1.91 billion. Lloyds share price opened lower on the following day.
Despite constant rate hikes by the Bank of England, the UK banks are yet to fully transfer the effect to their depositors. Consequently, the regulator has asked the banks to justify the low savings rates by the end of August. Bank of England is expected to hike the rates by another 25 bps in this week.
I have repeatedly mentioned the significance of the 200-day moving average in my previous LON: LLOY forecasts. Despite a strong rebound in July 2023, the shares failed to break above this key moving average. Consequently, the price got rejected and is now trading at the neckline of the head & shoulders pattern.
In a previous Lloyds share price forecast, I gave a bearish target of 38p in case of a head & shoulders breakdown. This target is once again on the cards as the price is retesting the neckline of the bearish pattern. After a breakdown, the stock showed a strong recovery in July. Another breakdown could be even more bearish.
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 Aug 01, 2023, 12:56 BST 12:56