Lloyds share price action is currently in upbeat mode, with investor demand driving the stock 4.67% higher today. This move comes as the company has indicated it would resume paying dividends to shareholders once the Bank of England lifted the ban.
The Bank of England is currently reviewing its dividend ban policy, raising hopes that it could be lifted soon. The BoE had initiated this ban a few months ago to ensure that banks in the UK had sufficient liquidity to remain solvent. Chairman of Natwest, Howard Davies, has said he is “not aware” of any big banks in trouble, even as his bank declares it is also willing to restart dividend payments once the apex bank in the UK gives the nod.
Technical Outlook for Lloyds Share Price
The price move on the daily chart that started as a bounce from the channel’s lower border continues today on the positive dividend news. This allows the uptick in Lloyds share price to challenge the 25.875 resistance.
A break above this level in continuation of this move targets the 27.47 price level, with 29.76 and 31.25 lining up as further targets to the north. The attainment of 29.765 and 31.25 relies on a breakout above the channel.
On the flip side, the arrest of the upside price move as a result of a lack of follow-through buying allows for opportunities to sell on rallies. 27.47 serving as previous strong support before it was breached. With this level also intersecting the upper channel border, watch for possible rejection here. If this rejection occurs, then a pullback to retest 25.87 and 24.745 may be on the cards. A return to the lower channel border could test the 22.70 price level, with a move towards 21.665 rendered possible if the channel’s trendline gives way.