Tesco Share Price Continues to Look Bullish Despite Rising CPI

Despite opening today’s trading session with a slight drop, the Tesco share price has been in an aggressive bullish trend since mid-October, which has resulted in the company’s value going up by over 20 per cent. Today’s slight drop also follows a streak of four consecutive bullish trending sessions that had seen the company’s value go up by almost 4 per cent. 

The current Tesco price surge comes amidst concerns about the rising cost of living in the UK, with the inflation rate hitting a 41-year high of 11 per cent. The company has also had to implement policies such as allowing salary advances to their employees who have been heavily impacted by the rising cost of living. 

Last month, the company also reported a 65 per cent drop in half-year profits to £413m, adding that they were also expecting the full-year report to mirror the current market challenges. As the cost of living continues to rise, the company has also seen most of its customers cutting down on their expenses, which has seen its inventory moving slower than usual.

Still, the company has continued to show strength in areas that matter, including paying dividends at an attractive current yield of 4.7 per cent. The company has also been able to reduce its debt from £13.2 billion in 2019 to £10.5 billion in 2022. It has also grown its cash flow from £889m in 2019 to £2.28bn in 2022.

Tesco Share Price Forecast

As the holiday season nears, which might spell continued growth for the company, I expect the current bullish trend to continue. Looking at the chart below, technical indicators such as the Williams Alligator also point to continued growth in the share price of the company. 

Therefore, I expect Tesco’s share price to trade above the 250p price level in the next few trading sessions. There is also a high likelihood that, for the long term, we might see Tesco’s share price trading above the 300p price level again. A trade below 225p will invalidate my bullish analysis.

Tesco Daily Chart