The Lloyd’s share price crashed by more than 0.70% on Monday as UK banks sold off. The stock is trading at 44.78p, which is about 4.7% below last week’s high of 46.80p. Shares of other banks like HSBC and Barclay’s also declined.
There was no news specific to Lloyds Bank that dragged its stock lower today. Perhaps, investors are worried about the UK economy as inflation is expected to keep rising. Lloyds Bank is often viewed as a proxy for the UK economy because of its national nature. Unlike banks like HSBC and Barclays, it does not have any major operations outside the country.
At the same time, analysts expect that the UK housing sector will go through some slowdown in the coming months. Indeed, recent data shows that mortgage uptake has started slowing down, which could affect the company’s growth.
Another reason why the LLOY share price is retreating is based on technical. As shown on the four-hour chart below, the Lloyds share price rose to a high of 46.80p in September. This was a notable level since it was the highest level in August. It has struggled moving above the level several times before.
Therefore, in most cases, assets tends to retreat when they hit a key level of resistance, which is happening now. It is also forming the handle section of the cup and handle pattern. Therefore, the stock will likely rebound later this month. If this happens, the next key resistance level to watch will be at 50p. On the flip side, a drop below 44p will invalidate the bullish view.