BT share price is still trying to break above the 128p resistance level. After a recent breakdown, this previous support is now acting as a resistance that needs to be overcome to aim for more upside. For this purpose, the price action this week is going to be very critical.
After a bounce at the end of last week, LON: BT.A closed at 127.3 with a 1.84% gain on the weekly timeframe. This also translates into a 3.58% price increase in BT shares on a monthly basis. The chart shows that there is a strong supply zone above the 128p level which caused a rejection earlier this month.
Due to the ongoing holiday season, the volume remained low in the last week. The trend is likely to continue this week as the markets open tomorrow after the Christmas holiday. Nevertheless, the FTSE 100 index still holds above the 7,685 points support level, which is a good sign for UK equities.
According to the latest news, BT plc might face a fine of 100,000 pounds per day for missing the 31 December deadline to replace Huawei equipment in its network. This fine, which is 10% of the daily revenue of the telecom giant, is on the table as an 11-month extension of the deadline is expected to end.
BT Share Price Forecast & Analysis
You can clearly see in the chart above that the price is consolidating below the 128p resistance. The bullish divergences on the 4H RSI and MFI are suggesting that the price may break out at this level soon. However, I would wait for low timeframe confirmations before rushing into any long trade at the moment.
In case of a rejection, the downside target of 118p will become valid which will be an 7% correction from the current price.