Trading Forecast on Barclays PLC

Barclays PLC (LSE: BARC), provides universal banking solutions in retail and business banking, corporate & investment banking and wealth management. The company is a British multinational financial institution, whose headquarters are in the UK. It operates in over 50 lands and regions around the world. In 2010, it had up to 2.33 trillion USD in terms of assets. It is the 4^th largest bank in the world. The company stock has been bearish in 2012 and has continued to be so. Many fundamental reasons are responsible for this, some of which are directly and indirectly related to Barclays itself. Verba volant, scripta manent (words fly away, writings remain), as scholars agree. The primary trend is down, and mean reversion techniques could be harmful.

Technical Forecast: Buyers Be Careful

Barclays’ shares were bullish at the beginning of 2012, until early March when the price almost hit the distribution zone at 260. Since then the stock has been bearish till now; the only exception being a counter-trend correction that occurred between June 6 - 21, 2012. This period would have afforded bullish swing traders some decent gains. Since June 21, the stock has been winding its way downwards. Recently, the price gapped up, proffering bears an advantage to possibly sell dearer.  Technically, what we have on this market is a bearish Confirmation Pattern. Looking at the company price chart, we see that the ADX period 14 indicates some strength in the current market movement, while the -DI (Directional Index) is still favorably given an advantage over its +DI counterpart. The MACD signal line is still below the zero line, though the histogram is against the alignment. The pair was trading at 165.65 when this article was being written and it may go upwards temporarily towards the resistance levels at 166.00 and 166.50: whereas if further signs of weakness is shown, the price may be forced to go down to the demand zones at 165.00 and 164.50.

Yes, buyers should be very careful on this stock, because the stock shows a downtrend. Honestly, bulls do not fare well in a predominantly falling market.  Investors who hold out too long enough against the major trend is going against the flow of the market. In fact, near-term northward rallies should give sellers opportunities to short the market at better prices (selling rallies in the context of a downtrend).

Conclusion: For me, there are no difficulties in predicting tomorrow’s prices. Barclays shares will not plummet forever (there is no such thing as an everlasting trend). As I know, after this long-term drop, the resilient Barclays shares will rise, going up - either tardily or quickly. When that time comes, the stock will shrug off any negative news that could pull it down. You might feel this is odd, but based on my experience, the Barclays price chart is showing vivid accumulation zones. Market fundamentals are not often judiciously expatiated on. Last week, a company’s stock was rising and this week it is nose-diving, albeit logical reasons behind this do not exist. The forgoing shows why I strongly advocate keeping things uncomplicated when approaching the markets. Looking at the chart and seeing what is happening could be all you need to do make objective judgments. Do not forget that traders can make money, whichever the way the market goes.

This article is ended with a quote from one of successful female shares traders in the world:

“If it's your dream to be a trader, realize that you'll be up against some resistance. Sometimes from those who love you, sometimes from yourself. No great trader ever rose to the top of their equity curve without it. Expect it, and even welcome it as you recognized that you're doing what it takes to get ahead… You can either stay exactly where you're at right now, or you can force yourself out of your comfort zone.” - Louise Bedford 

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Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

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