Week 21 (24th May-30th May): Lloyds Banking Group -Weekly Moo River Watch

Lloyds Banking Group

(based on 30 year advanced data charts)

Yearly

Price Chart: the downstream moo river here is a horrific one, even the 2003 bull market only managed to give LLodys Banking Group a pullback (a meandering across from lowerbank to upperbank) and a recent collapse due to the merger with HBOS is perhaps the final nail. Something must have gone wrong with this bank for the past decade. Today's recession only pushed the ugly stuff out from under the carpet. For now though, at least we will have a meandering across, if history is any guide, then it will give us a recovery value to 180 pence by 2013. If you are patient enough, you can almost triple your money from here.

Quarterly

Price Chart: you might like the idea of tripling your money in four year's time, in reality, if you watch this share, you are going to have jittery nights to sleep on. It is possible that we won't see £1 for most of the 2009 and there are occasional dives into those unmentionable horrible low levels again and again, as the fear of nationalisation is still very much there. The good news is, if you think this is a good news, this is the end of the bear market, either this bank gets nationalised or it takes off from 2013 onwards.

None of the momentum indicator is showing a decisive W shaped rally or a definitive bounce yet, though some are in deeply oversold levels, so surely the only way is up, or is it?

Monthly

Price chart: the maximum monthly range is between 88 pence and 31 pence, so we meander across to the upperbank.

Rsi: it is so oversold that it feels like being stuck in the deepest well, with lots of mud on top of it. We need to at least shoot through the water surface of 30 to have a breath of fresh air.

Other momentum indicators are not overly enthusiastic either, though most are well oversold, but few are having a rally based on a W. The oddly shaped W on Stoch is an encouraging sign, the one on Elder Ray is better shaped. There is hope, like they say, from these oversold levels, some visionaries or long-term investors might see some value here, though it will be a long journey to recovery, it does have scope for improvement, though scope might be the key word here, and there is also a possibility that when the economy pulls out of the recession, the giant bank might be broken back into two banks again. Maybe you can not see this possibility but you can nevery say never on this scenario, as a fully recovered combined banking group will almost be a monopoly in so many ways.

Weekly

Price Chart: we seem to be standing pretty upon Wilder's smooth MA20 line or the bollinger midline near 51 pence, though the maximum downside for the coming week is near 32 pence and the maximum upside is near 90 pence. We are enjoying some sort of recovery here, though it is a slow burner.

RSI: make no mistake that this share has also escaped that long running downstream moo river and it has actually managed to breach upperbank 1 earlier this month and now may even try to reach upperbank 2 just under 60, which will be a significant progress and I have reserved upperbank 3 just under 70 for the extreme of fantasists.

MACD: you must admire the bottoming up pattern here, with two W's connected with a V, which is something of a beauty. If you read my comments on the gold, you might find a reversed process in progress, with two M's there shaping up a ginormous M. It is all in the eyes of the traders to see the signals that the market is giving out in the charts, which is why I prefer technical analysis, for it is something everyone is capable of doing on their own.

Elder Ray: it has a nasty M there, so it is at least an anticipatory M, which means a top is quite near.

Repulse: if you like V shaped rallies, you will like the giant V here.

Overall, if you are a Lloyds Banking Group shareholder, you are either a very long-term investor, holding onto this share till 2013, or you are a short-term gambler, buying from 50's downwards and selling them from 70's upwards and you must be prepared for the constant threat or rumoured threat of nationlisation, when things turn nasty again. This share is only for the very hardened investors or speculators, where risk outweighs return, but the return can still be an attractive one, if you can sleep on jitteries as I mentioned above.

Good luck.