Is Sainsbury’s share price about to set a new all-time high?

Sainsbury’s share price has surged this year to the highest level since 2018. However, the grocer may soon be on its way to an even more impressive record.

J Sainsbury plc (LON: SBRY) finished yesterday at 292.80p (+3.35%) within a whisker of 2018’s 295.40p peak. However, the price is now just 4% below 2007’s all-time high of 308.00p. And considering the parabolic price appreciation, that record may not hold out for much longer.

The UK’s second-largest supermarket chain has been the beneficiary of speculation at one of its closes rivals. The ongoing bidding war for fourth-placed rival Morrissons has the market pondering if Sainsbury’s may soon draw the attention of private equity.

This has helped the stock improve on an already impressive performance this year. Basis yesterday’s closing price, the retailer has gained more than 33% since the start of the year and 86% from the March 2020 pandemic low.

This incredible run of form has seen Sainsbury’s share price finish higher in 18 of the last 23 weeks.

With the price approaching the ultimate test of resistance, the question is, will it go higher, or does this mark the top?

SBRY price forecast

The weekly chart highlights the significance of the approaching resistance level. Previous attempts to scale the 308p all-time high have resulted in serious failures.

After reversing from 158p in 2011, Sainsbury’s share price climbed steadily for two years. In November 2013, the price traded as high as 292.40p before dropping 45% in the 12 months that followed.

Again in August 2018, another attempt followed. However, this time, the price got to 295.40p before reversing lower.

When world markets crashed in 2020, Sainsbury’s fell to exactly 158p. And is now again above 290p.

On that basis, 295.40p holds the key. If the price reverses lower from here, Investors may fear a repeat of previous failures. Although, if SBRY convincingly clears this considerable resistance, it may signal the 2007 record will be next to fall.

However, if the share price reverses below 260p, It may confirm the worst of the bulls’ fears.

Therefore, buying here is fraught with risks. Strangely, buying the stock above 308p may offer less risk than buying it below. At least that way, we can discount a repeat of 2013 and 2018.

Sainsbury’s share price chart (Daily)

Sainsbury's share price

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