Lloyds share price, which has been in a state of free-fall after the UK government sold off most of its holdings in the bank, continued on its downward trajectory on Monday. The company announced Monday that it was going to ban all its consultancy-supplied limited company contractors.
This move follows that of HSBC, and many more companies could follow suit to avoid tax liability for their private contractors under the new IR35 reform, scheduled to take effect in April 2020. This news did not temper the bearish sentiment on the stock, which is now trading 0.68% lower on the day at 58.05.
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Technical Outlook for Lloyds Share Price
Lloyds share price broke below the symmetrical triangle on the weekly chart and is now testing the support formed by the ascending trendline that connects the weekly lows from 9 September 2019 to date. Horizontal support exists at 58.57, which intersects the trendline and also adds credence to this area as a critical support area.
A break of this trendline to the downside sends Lloyds share price even lower, targeting the next support level (56.10) that is formed by the previous lows of 15 October 2018, 24 June 2019 and 4 November 2019. A price move to this level would complete the measured move from the triangle’s broken border.
Below this level, further support exists at 50.44 (24 December 2018 and 7 October 2019). Price would need to break below the 56.10 level by a 3% penetration to target this next support.
On the flip side, failure to breach the ascending support trendline will initiate a pullback towards the broken triangle border, where Lloyds share price can then target the 61.87 former support-turned-resistance. This area is the site of previous highs of 18 February and 21 October 2019.