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Lloyds Share Price Could Pop Above 50p Soon – Pattern

Lloyds Bank shares have staged a strong comeback in the past few months even as the outlook of the British economy darkened. After falling to a low of 38.52p in October, the stock has rebounded by about 20% to 46p. As it rose, the stock outperformed other British banks like NatWest and HSBC. So, what is in store for the Lloyds share price in 2023?

UK economic outlook

Lloyds is a major British bank that serves over 26 million customers across its multiple brands like Halifax and Scottish Widows. It provides numerous services like personal lending, credit cards, mortgages, and commercial banking. The firm also provides some wealth management solutions through its Embark business.

Lloyds Bank is closely intertwined in the British economy. As a result, it tends to do well when the economy is growing and vice versa. This explains why the company’s stock dropped by about 8% in 2022 as the British economy recoiled. The economy is facing high inflation, significant labor strife, and slow economic growth.

2023 will likely be a difficult year for the UK economy as it faces a triple whammy of issues. Interest rates are expected to remain at an elevated level while inflation will remain stubbornly high. Growth will decelerate during the year. 

Lloyds Bank slow growth

Lloyds has been hit by this triple whammy. In the most recent quarter, the company set aside hundreds of millions of pounds in provisions for bad credit. As the biggest domestic bank in the UK, the company was hit more than other companies.

Higher interest rates in the UK will mean more interest income. However, the triple whammy explained above will likely have a negative impact on the company’s performance as defaults rise. 

The most recent results showed that Lloyds made more than 9.52 billion in net interest income the nine months to September 30 up from 8.27 billion in the previous period. Its other income rose to 3.8 billion pounds while its net income rose to 13 billion pounds. Statutory profit after tax dropped to 4 billion pounds.

Lloyds share price forecast

The daily chart shows that the LLOY share price has been in a comeback in the past few months. This recovery stalled after the stock reached the resistance point at 47.36p. It has now formed a golden cross pattern, which happens when the 200-day and 50-day moving averages make a crossover. It has also formed what looks like an inverted head and shoulders pattern.

Therefore, Lloyds shares will likely have a bullish breakout in 2023 as buyers target the key resistance point at 50.5p.

lloyds share price