The Tesco share price traded sharply lower this Monday as the global market selloff took hold of the UK stock market.
Tesco’s share price performance has been disappointing in the last month or two, as analysts are predicting a 9% drop in revenue for 2020. Earnings also look set to take a hit, as extra costs of hiring nearly 50,000 workers to cater to the pre-lockdown shopping rush, as well as replace sick or dead workers, took a chunk from the increased sales numbers.
Investors would be watching to see if Tesco can make the best of the increase in online shopping that looks set to follow the new, tighter lockdowns. Perhaps. Can this allow Tesco share price to find support above 214.0?
Technical Levels to Watch
The megaphone top pattern on the daily chart that displays Tesco price action is resolving in the expected direction. The breakdown is testing support at 220.2. Completion of the breakdown move allows Tesco to aim for the 214.0 support, with 211.3 lining up as an additional downside target.
On the flip side, a recovery that comes from a bounce on 220.2 targets 224.0 initially, with 228.0 and 231.4 also lining up as additional targets to the north. However, only a break of 234.3 allows the uptrend to resume. This uptrend would then target the 239.7 resistance, and invalidate the expanding triangle/megaphone top pattern.
Tesco Share Price; Daily Chart