What Next for the Diageo Share Price- Buy, Sell, Hold?

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Diageo share price is falling today as traders assess the ongoing curbs on entertainment as the number of coronavirus cases continue rising. The shares are down by more than 1%, becoming the fifth-worst performing stock in the FTSE 100.

The coronavirus outbreak is continuing even as the UK continues its vaccination process. The country revealed more than 35,000 cases yesterday, bringing the total number of infections to more than 2.1 million. Deaths rose by a record 691 to more than 68,000.

According to media reports, the UK government is toying with the idea of more lockdowns to prevent the illness. As a result, bars, pubs, and restaurants could see little action during the busy Christmas season. Indeed, shares of the ever-busy JD Weatherspoon and Restaurant Group are among the worst-performing shares this week.

While Diageo will be hurt by the new lockdowns, the company is at a relatively better position than its peers because of its global nature. It sells beer and other products in hundreds of countries around the world. Also, the company could benefit from online shopping of these products.

In general, analysts are optimistic about Diageo share price. According to data compiled by Marketbeat, the average forecast is about 3,108p. That’s relatively higher than the current price of 2,960p. Analysts are generally bullish about the firm’s shares. Those at UBS, Goldman Sachs, and Morgan Stanley believe that the shares could bounce back. Those at JP Morgan are relatively bearish with their target being at 2,700p.

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Diageo share price forecast

A look at the daily chart below shows that Diageo share price has risen by 43% from its YTD low of 2,057. In the past few weeks, however, the stock has been moving sideways between the support and resistance of 2,881p and 3,085p.

It is also slightly below the 78.6% Fibonacci retracement level and slightly above the 25-day and 50-day exponential moving averages. Therefore, in the next few days, we believe that the shares will remain inside the current range.

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