Lloyds share price continues its relentless selloff which was kicked off by the UK government’s sale of nearly all of the last of its holdings it acquired in the bank in 2008. In just a space of 4 months, Lloyds share price has tumbled by nearly 50%. The reasons for this steep drop have varied over time. However, the latest selloff was triggered after Credit Suisse downgraded the stocks of several UK banks. Even though Lloyds was unaffected by the downgrade, the general lack of investor confidence in the sector has rubbed off on the stock, and it is still experiencing considerable dips in price.
Lloyds share price is down 0.98% on the day and is on the verge of a 3-day losing streak. The company is trying to shake off one of the biggest scandals in UK banking history, as a review of the payouts that the bank made to victims who were defrauded by its branch in Reading, England begins.
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Technical Outlook for Lloyds Share Price
Lloyds share price is currently trading at 29.44. It is challenging the 29.76 support level, which is where Lloyds share price last saw a price bottom on 30 July 2012. Indeed, the price pattern of the last month of trading closely resembles the one seen at the time, where an inverse head and shoulders pattern allowed Lloyds share price to make a recovery that eventually took it on a two-and-a-half-year bull run.
If Lloyds share price can bounce off this support level, this could provide a recovery that targets the 32.95 resistance (April and July 2012 peaks). Above this level, the critical 37.47 price top comes into play. This price level has previously been the neckline resistance of the 2012 inverse head and shoulders pattern. An upside break of this price level could trigger a significant recovery for Lloyds share price, with a projection move that could get up to the 50.43 resistance in the medium-term. However, such a move would also need to take out resistance levels at 40.66, 43.84, 46.95 and 48.12 to become a reality.
On the flip side, a breakdown of the current support opens the door for a drop towards 27.76, with the previous shoulders coming into play at 25.09 if a decline below 27.76 is actualized.
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