I have enjoyed the dire share price targets served up by “leading” City brokers regarding Tesco (LON:TSCO). Indeed, it was always going to be a tough call for the bears to see Tesco at 130p or 135p when this was the lowest the stock has been since its crisis began a few years back.
CEO Dave Lewis has lived up to his “drastic” label, and even with the competition and now the prospect of inflation, one has to say that on a fundamental basis the worst is almost certainly over. If you add in rumours that the supermarket could positively re-organise its property portfolio, there could be a decent fundamentals story to chase here.
As far as the share price is concerned there was a big gap to the upside at the beginning of last month, and even after a sharp attempt to fill it, this remains unfilled. On such a basis alone one would be very bullish on Tesco shares from a technical perspective.
The target here over the next month is the top of a rising trend channel from August at 260p over the next 1-2 months. Only back below the 50 day moving average at 198p delays the upside scenario.