The Tesco share price has surged to the highest level since July 2014 even as concerns about the Omicron variant remains. TSCO shares are trading at 288.50p, bringing its year-to-date gains to more than 17%. Other retail stocks like Marks and Spencer and Morrisons have also done well.
Tesco shares have jumped as investors predict that the current Omicron variant will lead to more demand for groceries and other items this Christmas season. As you recall, because of its national reach, Tesco was one of the top beneficiaries of the previous lockdowns.
Now, there are signs that the UK is moving back to lockdowns. For example, the Boris Johnson administration is considering a 1 billion pound grant to hospitality firms that will be affected by these measures. Also, according to the Telegraph, these lockdowns could come as soon as next week. The stock is also rising as investors anticipate a strong holiday season.
Still, while the company is expected to do well, there are concerns about the rising costs and staff shortages. Recent data showed that UK and cost of labour are rising.
Tesco share price forecast
The daily chart shows that the TSCO share price has been in a strong bullish trend in the past few months. The trend gained steam in October when the stock moved above the key resistance level at 250p. This was both an important psychological level and the highest point on January 27th.
Since then, the shares remain above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has been rising.
Therefore, in my view, I believe that the trend is your friend. This means that the stock could rise to about 300p in the next few days. This is in line with my previous estimate. The bullish trend will remain as long as the price is above the two moving averages.
