Is HSBC Share Price Setting Up for a Bearish Reversal?

The HSBC share price has continued o trade downwards for the third consecutive trading session and is already down a percentage point. The continued bearish trend comes amidst calls by its largest investor, Chinese insurance giant Ping An, to reduce its operating costs by axing jobs and exiting sub-scale peripheral Asian markets. 

Ping An also indicated that more resources should be reallocated to the Asian region for the company to gain higher returns. He pointed out that the region contributed to the company’s 68.7 per cent of the total pre-tax profit in the first half of 2022. In comparison, the European and North American businesses contributed  10 and 5 per cent, respectively. In Latin America, where the bank also has a huge presence, the pre-tax was only 5 per cent of the total. 

The calls by Ping An also came at a time when the insurance company, which is the majority shareholder of HSBC with an 8 per cent stake, is pushing to have the company split into two, the Asian and Western operations. The investors argue the move would allow the Asian business, which generates most of its profits, to be independent and make autonomous decisions, which could boost HSBC’s profitability in the long run. 

HSBC Share Price Forecast

Despite today marking the third consecutive trading session that HSBC’s share price has been dropping, the past two weeks have been significantly bullish. The chart below also shows prices have recently broken above the 477p supply level and managed to extend the bullish trend before the current bear trend. 

Therefore, I expect the resumption of the aggressive bullish trend. There is a high likelihood that we might see HSBC’s share price hitting and trading above the 500p price level. However, falling below the 460p price level will invalidate my bullish analysis.

HSBC Daily Chart