The HSBC share price has outperformed peers in 2022 as investors cheer the company’s exposure to Asia. The stock is trading at 525p, which is about 51% above the lowest level in 2021. The shares have risen by over 12% this year while the SPDR Bank ETF (KBE) has fallen by over 25%.
Bank earnings ahead
HSBC has been executing a turnaround strategy in the past few years. The new approach has seen the bank shutter some of its international presence in places like the United States and France. Instead, the bank has been focusing on emerging and fast-growing places like China.
At the same time, the bank is building its wealth management business as it seeks to compete more with other large players like UBS and Credit Suisse. All these events have helped to support the HSBC share price, which came under pressure from China and western officials.
Earlier this year, HSBC came to the spotlight after a major holder of its stock pressed the company to break into two. The goal was to create a large Asia-only bank and a smaller one that focuses on Europe. While the plan looks good on paper, HSBC’s management warned that it could costly and have a negative impact on the company.
The next key catalyst for the HSBC stock price will be America’s bank earning season that kicks off on Thursday. Some of the biggest American banks like JP Morgan, Morgan Stanley, Citigroup, and Wells Fargo are set to publish their results. These numbers will act as a barometer for what HSBC will publish on August 1st.
Analysts expect the banks to publish mixed results. While net interest income is expected to have risen, loan growth will likely drop. Companies will also warn about the dramatic decline of the investment banking division.
HSBC share price forecast
The daily chart shows that the HSBC stock price has been in a bullish trend in the past few months. The shares have managed to rise by about 12% this year. It remains above the ascending trendline shown in purple. It is also being supported by the 25-day and 50-day moving averages. The stock is also slightly below the important resistance point at 514p, which was the highest point on April 20th.
Therefore, I expect that the stock will pull back as sellers target the lower side of the ascending trendline into earnings. If this happens, the next key support level to watch will be at 510p. A move above the resistance at 533p will invalidate the bearish view.