Tesco share price, which had been on a roll after the launch of the company’s Eat Out to Help Out program, has hit a roadblock today after the news of a coronavirus outbreak among staff at a Tesco Extra store. This outbreak is coming on the back of a surge in coronavirus cases across Swindon town. The government has placed the city on a coronavirus watchlist. Tesco has released a statement reiterating that it has put in place several measures to keep its staff and shoppers safe.
As lockdowns are eased across the UK, isolated outbreaks have been reported in Swindon, Lancashire and Preston. Preston is scheduled for lockdown as coronavirus cases have tripled in the last two weeks, according to local officials close to the matter. Swindon is among 29 counties now being watched by the government.
Tesco share price is currently trading at 226.4, or 0.5% higher after pulling back from intraday highs at 227/9 in a week which has so far, not presented a lot of good news around the stock. The company recently had to apologize for images on a children’s book titled “That’s Not My Mermaid”, which depicted a black mermaid with a side caption; an image that caused outrage because it was deemed racist.
Yesterday, price broke out of the ascending channel to the upside, but failed to make much progress today as the daily candle met resistance at the 228.0 price level (previous highs of 7 April and 17 June).
However, a close above the channel’s return line (upper border) confirms the break of the price above the channel. It is possible for a pullback and a bounce on the channel’s return line, which rests on the 224.0 support, to occur. This move may allow for another push to the upside to test the 228.0 resistance. A breakout above that level opens the door towards the 234.3 resistance (low of 20 May and highs of 28 May and 23 June). Above this level, 239.7 and 244.8 may become potential upside targets.
On the flip side, a breakdown of the 224.0 support allows the Tesco share price candle to re-enter the channel, with a further decline making 220.2 the next downside target. It has to take a breakdown of the channel’s lower border to allow 214.0 and 211.3 to come into the picture as further targets. Otherwise, we may see price trading between the channel borders if sellers have no motivation to force a channel breakdown.
