By Anna Peel. Originally published at ValueWalk.
The Barclays PLC (LON:BARC) share price has been caught between the positive effect of higher interest rates on revenues for financial products such as credit cards and loans and the negative impact of rapidly rising interest rates on stock prices, the ongoing war in Ukraine, strict Covid-19 lockdowns in China and recent general risk-off sentiment.
With China opening up again and several commodities such as Natural Gas, London Wheat and base metals such as aluminium having given back much of this year’s strong gains, the inflationary threat may be abating which could boost stock markets.
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A Good Time To Buy Barclays Shares
Alex Rudolph, Market Analyst for IG comments on whether investors should take advantage of this indication:
“Exactly two months ago I argued that it might be a good time to buy Barclays shares. Since then, the Barclays share price has risen by close to 20% to its 173 pence late May high before coming off again, in line with general risk-off sentiment, triggered by fears of a global recession.
Since the UK mega bank’s share price held along the 55-day SMA on three separate occasions since mid-June, the odds are that another plateau has been formed on the daily candlestick chart.
Therefore, provided that last week’s low isn’t being slipped through, and once the mid-June high has been exceeded, a bullish continuation of the Barclays share price’s advance from its March-to-May lows is expected to unfold.
In this scenario – this year’s downtrend line should soon be bettered with the mid-March, late May and early June highs as well as the 200-day SMA being in focus.
If overcome, a long-term bottoming formation would be confirmed with the January peak at 214.6p being back in the limelight. Only a currently unexpected bearish reversal and fall through last week’s low would negate the currently short-term bullish outlook. Even then the major March-to-May support zone would once more be expected to hold.
Only a slip through 140.1p may lead to a sell-off taking the share to the 129.5p to 125.1p region which consists of the June 2020 high and January 2021 low and is also where the 61.8% Fibonacci retracement of the 2020-to-2022 advance can be found.”
For more advice and information on when and how to invest in Barclays, you can readthis article from Axel.
AboutIG
Established in 1974, IG is a global leader providing trading and investment opportunities to people worldwide. IG analysts report every day on the latest changes in the financial markets, providing timely fundamental, economic, and technical analysis and a close examination of promising chart formations with live currency quotes. IG also provides analysis of market moves, explaining economic, political, and technical factors driving the market.
About Axel
Axel Rudolph is a Market Analyst at IG and a multiple award-winning cross asset technical analyst, having over the last decade been ranked in the top 3 in the international FX Euromoney Survey and winning it in 2014 and in 2019.
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