Tesco Share Price Shows Weakness After A Strong Rally

Summary:
• Tesco share price is struggling to break above the key resistance level of 272p. A breakout may unlock huge upside.

Tesco (LON: TSCO) share price seems to be facing headwinds after failing to reclaim the 272p level. The shares of the British retailer now sit 0.68% under the 272p level despite the bullish sentiment experienced in the UK equities. On Wednesday, Tesco stock changed hands at 270.2p, down 1.05% till press time.

The negative price action in the grocery retailer’s shares comes at a time when the market sentiment in UK equities remains bullish. The FTSE100, which is a benchmark index for the top 100 companies listed on the London Stock Exchange, gained 76 points on Wednesday. Investors are waiting for the Bank of England’s decision regarding the rate hike on Thursday.

Tesco PlC Gets Accused Of Dodgy Price Strategies

Tesco has been accused by the consumer organization of wrongdoing. It is alleged that the retailer has been using suspicious pricing strategies to give a false impression of a good deal. The organization found out that 29% of the members-only promotions were priced at regular prices nearly half the time.

Grocery Inflation Eases In August

In other news, Britain reported a fall in grocery inflation for the sixth consecutive month. The annual grocery inflation fell from 12.7% in August to 12.2% in September. The research firm Kantar, has recently reported that 95% of consumers still worry about high grocery prices due to rising energy costs. Tesco share price is trading 5.26% below its yearly high.

Tesco Share Price Breaks Back Below 272p Key Level

As mentioned in my previous forecast for LON: TSCO, the price bounced from the 200 MA and retested the 272p resistance level. However, the shares are experiencing strong selling pressure above the key resistance level. Thus, the price has already corrected 1.11% and is now trading back under the 272p level.

The Tesco share price forecast will flip bearish if the price fails to reclaim the 272p key level. In this case, I expect a 3.14% correction towards the 200 MA, which lies at 261.6p. This bearish outlook will be invalidated in case of a clear breakout above the 272p level.

In the meantime, I’ll keep sharing updated Tesco stock price forecasts and my personal trades on my Twitter, where you are welcome to follow me.