Tesco share resumed a downward trend after Friday’s positive session. Tesco shares traded lower for eight straight sessions the previous two weeks. Despite the impressive rise in sales for the first quarter, as traders bet that the return to normality will hurt Tesco’s online sales.
Tesco started an aggressive policy asking for deep discounts from its suppliers as it seeks to put price pressure on its discount competitors. Tesco is extending the Aldi Price Match campaign to almost 500 own-label products as it bids to recapture back the market share.
Tesco announced a 9.2% increase in first-quarter sales in UK and Ireland. Tesco Online sales were up 48.5% for the first quarter, increasing to almost 100% by the end of May. Tesco now delivers about 1.3 million orders per week. The Tesco Online division now accounts for 16% of total UK sales compared with 9% last year.
Total Sales came in at £12.2 billion for the period March-May, higher by 8.2% than the previous year. The company expects a £175 – £200 million at its banking unit after a rise in bad debt provisions on higher unemployment expectations in the UK.
Tesco Share Price Technical Analysis
Tesco share is 0.37% lower at 214.00 as the stock hovers around the two-month lows amid the rising competition and the price war from Ocado. The technical picture is bearish for the Tesco share, and lower levels might be on the cards. What can cancel the bearish momentum is only a credible move above the 50-day moving average at 229.
On the upside, initial support for Tesco share will be met at 213.80 the daily low. More bids might emerge at 210.30 the low from Friday’s trading session. A break below 210.30 might open the way for 206.90 the low from April 8.
On the flip side, first resistance for Tesco price stands at 217.90 the daily high. Next hurdle stands at 220.10 the high from July 8. Next supply zone stands at 226.5 the high from July 2.