Tesco share (LON: TSCO) price is retesting a very significant resistance on its chart and a breakout can take it towards fresh yearly highs. On Thursday, the stock of the grocery giant hit its highest level since February 2023 as the price soared to 294p. However, after a pullback, the shares stood at 289p at press time.
On Thursday, the Bank of England made its critical interest rates decision and kept the rates constant once gained. However, the British central bank vowed to maintain interest rates at their record highs for a long time to fight inflation. As a result, the benchmark FTSE 100 index surged to its 3-month highs and was up 90 points till press time.
Recently, Bernstein raised its price target for Tesco shares from 330p to 320p. However, this price target is only likely to be met if the stock breaks above a key level on its chart. This is the 289p resistance where the shares are trading right now. This seems to be the final resistance before a retest of the January peak of 304p.
Analysts expect the interest rates in the UK to remain elevated longer than the US as UK inflation is coming down at a slower pace than in the US. The YoY CPI remains at 4.6% which is well above the BOE target of 2%. This may impact the shares of grocery retailers like Tesco in the first two quarters of 2024.
LON: TSCO Analysis
For a better understanding, I have marked the key levels on the LON: TSCO chart, which the stock may respect in the coming weeks. As mentioned earlier, the most critical level right now its the 289p level which needs to be broken for more upside.
For bullish continuation, Tesco share price needs to close a few days above this level. However, in the event of a rejection from the current level, the immediate support level of 272p might come into play. The current state of the Relative Strength Index (RSI) indicates that bulls still have more gas left in the tanks.