Stock of the day: TESCO

New week, new trading opportunities. We start with an analysis of Tesco. The first time we mentioned this company was at the beginning of March. We saw a nice bearish setup, so we were pessimistic about the nearest future for this retailer. We concluded in the previous analysis:

“The sentiment is definitely negative and will stay that way as long as the price stays below the black neckline (which at the same time is the up trendline). The sell signal will be cancelled, when the price comes back above the mentioned resistance but chances for that are now limited.”

After that, the price continued the downswing without any problems. On March 7th and 8th  Tesco set new, long-term lows around 2.64 GBP. After that, bulls performed a counter attack, which managed to create the correction locked inside on a flag formation (green lines). And actually, this flag forced us to write this piece.

The flag finished on Wednesday, when the price broke its lower line. In addition to this, the price bounced off the horizontal resistance on 2.81 GBP (green). Those two things combined, give us a sell signal again. Sentiment on Tesco is negative and will stay that way as long as the price stays below the 2.81 resistance. Chances for a further drop are very high.