As I have stated on practically every occasion whenI have charted the banks for Spreadbet Magazine, I am not a big fan of the sector. Perhaps even worse, I remain amazed that the Great British Public remains more concerned about issues such as the EU and immigration rather than how much its very own banking sector is robbing from their accounts on a daily basis. It seems that the explanation is that we are happy to be robbed by our own people rather than foreigners? Nevertheless, for many people paying effectively 4% over the base rate for the mortgage is not something I would even have charged the late Ronnie Biggs!!!
However, moving quickly onto the current charting position at Lloyds Banking (LLOY) and it can be seen that the message here remains – “don’t get mad about the banking rip off, buy the shares instead”! What we are presently looking at here is the aftermath of a very bullish consolidation above the unfilled August gap to the upside through 70p. It is interesting that despite such a large untraded zone that the stock has, to this day, been unable to fill this feature, and in turn we now have a very bullish setup. Indeed, while there is no end of day close back below the floor of a rising July price channel floor / 50 day moving average at 77p one would be looking for a further acceleration of gains here. The favoured “minimum” target is the 6 month price channel top – as high as 86p – a decent end of February price target.
While shares of Lloyds have effectively been “limit up” in the recent past, the price action at fellow former fiscal disaster zone RBS (RBS) has became rather more mixed as the autumn progressed. In fact, the end of 2013 witnessed a final bear trap rebound from below the November 316p intraday floor and the 200 day moving average at 325p. The implication of all these shenanigans is that at least while there is no end of day close back below the 200 day line, one would be looking for further gains towards the post November resistance zone at 360p plus. Still, it has to be admitted that the recent consolidation here between say 320p – 340p may have not yet run its course. Those who are yet to be convinced in terms of going long here would wait on an end of day close back above the former October 349p support before pressing the buy button.
Finally, it is the former fiefdom of BarCap legend Bob Diamond which makes its appearance in today’s sector sweep. What can be seen on the daily chart of Barclays (BARC) is the way that we have been treated to quite a choppy range between 250p and 280p over the course of the autumn as the stock has made its efforts to base build. The likelihood now is that at least while there is no end of day close back below the grey 20 day moving average at 262p that one can give the benefit of the doubt to the buy argument. This is because the present set up appears to be a quite tight bull flag consolidation, one which should at least take the stock up to the area of the post May resistance at 300p plus. The reason for the optimism is that the current turnaround began with an unfilled gap to the upside, a chart feature which remains unfilled still. The timeframe on the upside could be as soon as the next 2-4 weeks.
TO READ MY COMPLETE 2014 OUTLOOK THEN CLICK THE IMAGE BELOW FOR YOUR FREE COPY