Tesco (LON: TSCO) share price has been one of the best performers this year. The stock has surged by 21.5% since the start of 2023. Technical analysis shows that the shares may have a pullback in the coming days. There are multiple fundamental and technical reasons why I expect the shares of Tesco PLC to drop.
On Thursday, Tesco shares dropped by 0.54% as the benchmark FTSE 100 Index slid for the second consecutive day. The index fell by 12 points during today’s trading session after a surge in the last two weeks. After making new yearly highs on Wednesday, Tesco stock changed hands at 274p on Thursday.
According to the most recent Tesco PLC news, the company has lost the court battle against the German discount superstore Lidl. The trademark lawsuit concluded after the proceeding in London’s High Court. Tesco was sued by Lidl in 2020 over the use of a yellow circle on a square blue background logo.
The biggest headwind for UK retailers is soaring inflation which once again remained in double digits during March 2023. The latest data showed that inflation rose by 10.1% during the third month of the year. This was higher than the expected figure of 9.8%. This also made the UK the country with the highest inflation in Western Europe.
Simple technical analysis of the LON: TSCO chart reveals the major levels of demand and supply. Recently the stock broke above its August 2022 high of 272p. This is a key level of supply and might result in a rejection in the coming days.
In the event shares gain strength above 272p, Tesco share price forecast will become very bullish, with a 300p target within bulls’ reach. The next few days will be very critical in this regard, along with the weekly closing. Another resistance on the daily chart is the 288p level which is 5.3% above the current share price.
I’ll keep sharing my updated price outlook on Tesco & other stocks in my free Telegram group, which you’re welcome to join.
This post was last modified on %s = human-readable time difference 13:47