LLOY Chart

[barjon]

Thought I'd try Paul's new toy with a couple of bank charts.

The first is LLOYDS which has 3 times failed to hold above 480 which is fib 50 resistance and is heading towards minor support at 420 then, if it breaks (which will also complete the triple top), fib 50 support at 390.

Not a healthy looking chart imo. What do you think?

Good trading

jon

 

[bonsai]

here is a slightly longer view.
Lower high
Broken support line
Falling 13 day
Weakened Ft relative.

That sounds so bad, it might even rally for a while ?

 

[bonsai]

we now have a very nice bounce of the 62% fib
and also right around previous 4th.

time to change tack ?

 

[barjon]

not sure I'm with you. I've got support fibs of the entire March
July move @ 32% 432 (broken), 50% 402 & 62% 379. Can't find
a 62% fib for it to have bounced from (although it did pull back
today from short term fib 62% @ 430) so you'll have to tell me
what I've missed!!

The triple top trough low @ 423 is co-incident with the May gap
and should offer resistance and I'd look for a close above here
for a first clue of changing tack. The target from triple top is 362.

jon

 

[barjon]

foghorn

Hi.

don't mind a bit of pollution!! on fundamentals they seem to have
been a good buy for some time - but the market doesn't seem to
agree yet?

good trading

jon

 

[bonsai]

barjon
the fib is already marked out on the chart above.
It sits at 413.
any pick up tomorrow may be the entry point.

but cancelled if we make a new low.

 

[barjon]

I can see the line but not where it comes from.

If my maths is up to it 413 is a drop of 73 from high and that is
62% of 118 which means the move started from 368 (486 -
118). The only thing I can see at that level is a rising gap on
7/4 - is that it?

jon

 

[barjon]

bonsai

bingo! we're just talking a different language - your 62 being my
38.

I've been so long replying because working things through
manually suddenly showed up my retracement levels as being all
to cock. I tested my retracement tool and found it ok on some
screens but miles out on others - another victory for technology.
A real head scratcher and I'm currently waiting for sharescope to
tell me what's wrong and send me a fix.

It's not all bad though, since I seem to have made some good
trading decisions based on totally incorrect figures! Perhaps
random entry points are the answer after all!!

good trading

jon

 

[bonsai]

lol

yea, I think I posted something about the problems I had with them.
doesnt sound as though they have fixed them yet.

 

[barjon]

can't blame sharescope - it was me again (as usual). had
inadvertently defaulted to log scale for some reason that escapes
me. all in order now, 'til I do something else stupid.

 

[foghorn]

I agree, barjon. The market doesn't seem to agree with the fundamentals, and we're getting some post-dividend downward drift as people who picked up stock before the XD date for that juicy dividend offload (just look at the volume prior to it going ex-dividend).

On fundamentals I am bullish in a big way, however I can see the short term bearishness in the charts that you guys are on about. Maybe I am learning this TA business after all

Hopefully it won't knock out my stop as I am bullish in the long term. but money management is King...

 

[JTrader]

At the moment LLOY seems to react to falls in the FTSE100 and Dow more dramatically so than BARC and ANL, anyone know why?
Recently LLOY bounced off 410 after it's slide from 486 - pre interim results. Given that LLOY was priced at over £8 in May 2002 and the companies strong fundamentals, how low can it fall before it continues it's recovery beyond £5 like ANL and BARC? (in theory)

Also, why did it fall so dramatically from May last year, was this due to the markets or LLOY or a combination of both?

Cheers.

 

[bonsai]

james
don't know for sure but the fact that the review was being undertaken was probably covered that time.

afx is as good as any, I suspect.

 

[JTrader]

Any ideas as to why LLOY continues to fall?
After announcing positive results in August it fell and having sold NBNZ recently it has continued to fall. I would have thought that this sale would have boosted the share price, but instead it has fallen below £4.

 

[foghorn]

fundamentals

The sales of the two profitable units in NZ and Brasil have been earnings dilutive, so until share buy backs start taking place there appears to be negative sentiment (as if that makes a change for LLOY recently ) Latest estimates were that LLOY needs to spend 1.2 billion buying its own shares to make the sales earnings neutral. Of course downward drift just gave LLOY more bang for its buck when the buybacks do start taking place, reducing this price.

That leaves plenty of money left over from the sale of the two units on the balance sheet, even the most bearish analysts don't see them cutting their dividend now, so at 8.5 ish% dividend yield the shares are a steal in the medium term. In the longer term LLOY's business strategy relative to the UK banking sector is still being questioned, and Scottish Widows continues to be of concern.

However being a mainly a UK bank, it's a geared play on the UK economy, it's actual margins aren't that bad, it just lost its way strategically, so overall I am bullish.

/fundamentals

(It's one in my buy and hold portfolio on fundamentals, I don't usually do TA on it for trading purposes)