Aviva share price lost more than 5% in today’s trading. The stock of the insurance company which caters to over 33 million people all over the world, finished 13.00 GBP lower at 243.10. Its technical setup on the daily chart also hints that it may continue its downward trajectory.
The insurer’s share price was drastically weighed down by the company’s announcement to suspend dividends. It was supposed to pay out 839.4 million GBP in June. However, Aviva’s decision followed the advice of the Bank of England to banks and insurance companies to suspend payouts and prioritize liquidity amid the coronavirus pandemic.
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Aviva Share Price Outlook
On the daily time frame, it can be seen that Aviva has been consolidating in the last few trading days. This is evidenced by the lower highs and higher lows that the stock price has been making since March 23. It’s worth noting that this consolidation is preceded by a sharp drop. Consequently, a bearish pennant chart pattern has formed. This is considered as a bearish continuation pattern and a close below the low of April 8 at 239.0 would effectively be a downside break for the pennant. In turn, this could signal a bigger sell-off, possibly to the lows of March 19 at 205.7.
On the other hand, if Aviva share price manages to hold on to support at 240.0, it could be a sign that there are still buyers in the market. The stock could then trade higher to near-term resistance at 278.6.
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