HSBC share price has retreated in the past few days. Shares of the biggest European bank by assets have dropped by more than 5% from its year-to-date high of 455p. It has also formed an island reversal pattern on the four-hour chart.
What happened: HSBC has made headlines in the past few months. Western countries like the US and the UK have put it in the spotlight because of its close ties to China. China, on the other hand, has placed it in an entity-list because of its ties to Western countries.
The bank is also said to be considering exiting its US business, where it has struggled to compete with the likes of Bank of America and JP Morgan. And this week, HSBC was forced to close its main branch in Hong Kong because of a coronavirus outbreak.
Meanwhile, the company is increasing its emphasis to the Chinese market, which is seen a substantial growth. Indeed, it has already moved some of its top executives to Hong Kong. Ideally, the firm wants to compete with Credit Suisse in targeting wealthy Chinese. It has also announced that it will pay dividend again for the first time since last year.
HSBC share price forecast
In general, the HSBC share price has done relatively well this year. It has already risen by more than 14% from where it started the year. However, this rally was interrupted a few days ago. A closer look at the chart shows that it has formed an island reversal pattern, which is usually a bearish sign.
Also, it has formed a head and shoulder pattern, although this has not been defined well. Therefore, while I still believe that the stock will rise to 500p, there is a possibility that we will see more weakness in the near future. A further decline below this week’s low of 420p will mean that there are still more bears who will push the price below 400p.
HSBC stock chart