Lloyds and the FTSE 100: how likely is a relief rally?

TL;DR

Lloyd's and the FTSE 100 are currently experiencing a relief rally, with Lloyds showing potential for upward movement in the near term.

Transcript

hello it's John Burford with chart of the week for Monday the 24th of October and I'm covering Lloyd's again today I'm covering Lloyd's quite extensively here because um I consider it as a as a major UK bank as a bit of a litmus test for the state of the UK economy if you recall in the corona crash uh not the corona crash sorry the credit crunch of... Read More

Key Insights

• 🛟 Lloyd's serves as a vital indicator for the state of the UK economy.
• 😘 The current low levels of Lloyds' shares suggest potential for upward movement.
• 👋 The short-term analysis shows a five-wave move for Lloyds, with a possible target at 56 pence.

Questions & Answers

Q: What role does Lloyd's play as a litmus test for the UK economy?

Lloyd's is considered a major UK bank and serves as an indicator of the overall health of the UK economy. Its performance can reflect the impact of economic downturns or recoveries.

Q: How have Lloyd's shares performed in previous recessions?

During the credit crunch of 2007-2009, Lloyd's shares dropped drastically from over three pounds to under 20 pence. This extreme example shows the potential consequences of a recession on bank shares.

Q: What is the short-term target for Lloyd's shares?

The analyst initially set a target of 50 pence for Lloyd's shares, which was achieved. The next target is 56 pence, the old high. However, reaching this target would require a favorable market environment.

Q: Is the FTSE 100 currently in a relief rally?

Yes, the FTSE 100 broke a major uptrend line but has shown signs of a relief rally. The market has experienced a first leg up and may continue to move upward until it reaches a potential stopping point around the 7300 area.

Summary & Key Takeaways

• The analysis focuses on Lloyd's as a major UK bank, acting as a litmus test for the state of the UK economy.

• Lloyds' shares have experienced significant drops in previous recessions but are currently at low levels, suggesting potential for upward movement.

• The short-term market analysis shows a five-wave move for Lloyds, with a possible target at 56 pence if it breaks the 43 pence resistance area.

• FTSE 100 has broken a major uptrend line but shows signs of a relief rally, with a potential target around the 7300 area.