Lloyds’ share price is slightly higher today but on low trading volumes. The stock is currently up 0.86%, even as it nears a critical resistance that matches a previous 2021 high.
The stock is now starting to show signs of price exhaustion, coming off a downgrade of the bank by Fitch from A+ to A. Fitch downgraded the stock after its qualifying junior debt buffer fell below the critical 10% mark. Lloyds shares now look to the annual general meeting, which was postponed last week after an aggrieved shareholder caused a disturbance.
Yesterday, Bank of England Governor Andrew Bailey reiterated that the BoE was not considering negative rates as it sought to fast track the UK’s economic recovery. Investors cheered the news and Lloyds shares saw some demand on the day.
Technical Levels to Watch
Lloyds’ share price is now testing resistance at 49.205. A break of this price level sets Lloyds’ share price on the way to new 2021 highs and continues the recovery of the stock with 50.435 as its new target. This price move also threatens to negate the rising wedge pattern. This pattern is invalidated if Lloyds’ share price breaks above 50.435 and attains the next upside target at the 51.00 psychological resistance (26 February 2020 low).
On the other hand, rejection at 49.205 or 50.435 favours a return to the lower border of the wedge as bears bid to break down this pattern. However, this move needs to take out the support levels at 48.125 and 46.615, with the latter being the barrier that holds the pattern intact. A breakdown of the pattern allows 46.615 and 45.00 to come into view, as bears seek to complete the measured move from the wedge’s collapse at 43.845.