Tesco share price has been in a strong recovery as UK stocks rebound. TSCO shares rose to a high of 270p, which was the highest level since May 18th of this year. It has jumped by over 10% from its lowest level in July. Other British retailers like Marks and Spencer and Sainsbury have seen their shares rebound sharply as well.
Tesco is seen by many investors as one of the leading value stocks in the FTSE 100. The firm has a strong and growing market share in the retail industry. It has thousands of stores in the UK and dependable revenue and profitability.
In June, the company said that its business was doing well amid the ongoing challenges. Its total revenue rose by 2% to 13.5 billion pounds as it expanded its market share by 37 basis points. The firm’s Booker division saw robust growth as its sales prices rose by 19% to 2.1 billion pounds. Most importantly, its banking division has been helped by the soaring interest rates.
Tesco share price recovery has mirrored that of other American retailers. Earlier this wek, Walmart and Home Depot reported strong results. Target and Lowe’s, on the other hand, had mixed results. Still, American retail shares have done well in the past few weeks.
The biggest risk for Tesco is that inflation is soaring, which will likely affect the volume of goods people buy. On Wednesday, data by the Office of National Statistics showed that the country’s inflation surged to the highest level in decades. Another report by Kantar showed that grocery sales rose to a record high.
Therefore, focus now shifts to the latest retail sales data by the Office of National Statistics (ONS) that are scheduled for Friday. Analysts expect that retail sales declined sharply in July. Precisely, they expect that the headline retail sales dropped by 3.3% while core sales fell by 3.1%.
The four-hour chart shows that the TSCO share price has been in a strong bullish trend in the past few days. Along the way, the shares have formed an ascending channel pattern that is shown in green. It is being supported by the 25-day and 50-day moving averages. Also, it has risen above the 38.2% Fibonacci Retracement level.
Therefore the shares will likely continue rising as bulls target the 61.8% retracement level at 280p. A move below the support at 265p will invalidate the bullish view.
This post was last modified on Aug 18, 2022, 09:18 BST 09:18