Tesco (LON: TSCO) share price has played out exactly as I predicted. The shares failed to break above the 288p resistance and faced intense rejection. Consequently, the stock of the British grocery giant is trading 8.19% below its yearly high.
On Friday, UK stocks showed a very negative sentiment. The benchmark FTSE 100 index fell by 47 points as the major stocks dropped to their fresh weekly lows. Tesco shares remained sideways on the last trading session of the week. The latest analysis reveals that Tesco shares may have more downside.
As per the most recent Tesco plc news, the grocery retailer has been reported to the competition watchdog by a consumer group due to pricing concerns. According to the details, Tesco failed to provide detailed pricing information on its loyalty card offers.
The latest data reveals that the UK grocery inflation remained at 17.2% in May. This shows the second consecutive month of decrease. Stats show that the UK inflation is the highest among the Western European countries. High inflation is acting as a strong headwind for Tesco share price.
Technical analysis of LON: TSCO chart shows that the bears are gaining momentum after a breakdown from the trendline. The price soared above its August 2022 highs in May 2023 but failed to hit the 288p resistance. This gave bears enough power to overcome the bulls and break the uptrend on the daily chart.
Therefore, Tesco share price forecast will remain bearish as long as the stock trades below the 272p level. A reclaim of this level can trigger another rally toward 288p which is the next major resistance on the chart of the grocery retailer. The next week’s FOMC meeting in the US and CPI data will play a key role in this regard.
I’ll keep sharing my Tesco and other stock trades in my free Telegram group, which you’re welcome to join.
This post was last modified on Jun 09, 2023, 17:12 BST 17:12