The HSBC share price has bounced back in the past few days. The stock has moved to 430p, which was about 4.70% above the lowest level on Friday last week. It is still about 20% above the lowest level in September this year.
HSBC is a leading British bank that generates most of its income from Hong Kong and the Asian region. The company operates several products, including consumer lending, business financing and wealth management.
The HSBC stock price has done well this year because of several reasons. For example, the company has reported strong financial results. The most recent results showed that its profits jumped by more than 76% while its revenue rose to more than $12 billion. Its CET ratio rose to 15.1%, meaning that the company is in a solid state. It also boosted its outlook for the year since it expects that its revenue will be more than $32 billion.
HSBC has also done well because of the overall strength of the UK economy. In the past few months, data from the UK has shown that the economy is doing well. Retail sales have risen while the unemployment rate has retreated. Analysts expect that this strength will push the Bank of England (BOE) to start tightening. Higher rates will provide a near-term lift to HSBC’s business.
Meanwhile, the company launched a new suite of products. On Wednesday, it announced that it was launching a new feature that will help customers invest in ready-made portfolios. Customers will need to invest a minimum of 50 pounds. The new product will see the bank compete with JP Morgan, which recently acquired Nutmeg, a robo-advisors.
HSBC share price forecast
The daily chart shows that the HSBC stock price found a strong resistance level at 457p. It has struggled to move above this level several times this year. A closer look shows that the stock has formed what looks like a cup and handle pattern that you can see in red. The recent pullback is part of the handle section of the pattern.
At the same time, the stock is trading at the 50-day moving average. Therefore, I suspect that the stock will have a bullish breakout. If this happens, the next key level to watch will be at 500p. This could rise in December if the Santa rally happens. This view will be invalidated if the stock moves below the key support at 350p.