Tesco share price soared for the second day in a row as it benefitted from the boost in stock prices that have hit the UK retail supermarket sector. The price surge follows that of Sainsbury’s and Morrisons, driven primarily by takeover activity.
Following Morrisons’ board’s acceptance of an $8.7billion takeover by a consortium led by Fortress Investment Group, which comes after Czech billionaire Daniel Kretinsky upped his stake in Sainsbury’s in April, UK supermarket stocks are the rave of the moment.
Tesco share price’s bullish activity came as stocks had dwindled from January highs at £250 to just below £224 on Friday. With price sitting at a decent support level, a fresh wave of demand crept into the stock on Monday, enabling Tesco’s share price to gain nearly 5% this week.
Technical Levels to Watch
The surge in Tesco share price allowed the bulls to break the symmetrical triangle on the daily chart, after a brief test of the 231.90 resistance barrier. Tuesday’s push met resistance at 236.25, followed by pushback from the bears, which has sent the price back to the 234.25 former resistance-turned-support. If this support holds, we may see a fresh demand-driven push to retest 236.25. A break above this point allows Tesco share price a chance at targeting 239.70, with 245.00 serving as an additional barrier to the north.
On the flip side, a breakdown of the 234.25 support allows the pullback to continue towards the triangle’s upper edge at 231.90. If this support gives way, the breakout move is truncated, and the pathway towards 228.05 opened to sellers. Below this level, 224.00 and 220.20 serve as additional downside targets if the decline is more extensive.