Stock of the day: Lloyds Bank

This Wednesday, our stock of the day is Lloyds, the British bank that we also analysed back at the end of October. Back then, the price was suffering a bit after two bearish days in a row, but we didn’t lose our confidence in this company and were forecasting a further upswing:

“Those two bearish days can actually be pretty useful because they create an opportunity to buy this paper at a slightly better, and lower price. We still have many supports here including three horizontal and dynamic up trendlines so buyers can feel quite confident. The buy signal will be cancelled when the price breaks the blue line. However, chances of that happening are quite limited.”

Let’s see how that worked out, shall we? Well, to be honest with you, it worked out almost perfectly! We went from 0.479 to 0.51 very quickly, almost instantly. That was it though. The beginning of November was pretty rough for the stock. The price dropped and we’re on the horizontal support of 0.479 again. Recent swings allowed the price to create a head and shoulders pattern, which can be a major sell signal. It can be but doesn’t have to be. As for the proper sell signal, we need to see the breakout of the neckline first (black). Only the price closing a day below that support would be significant enough to trigger a sell signal. As for now, we wait and buyers can all still have hope.