When Barclays shares should cause alarm

Barclays Bank

We urgently need to talk about Barclays. Of course, there's no real reason other than we promised a monthly update and the January clock has just about run out! In honesty, since we last ran the numbers in December, very little has changed.

The problem with the share is both the red and blue lines on the chart. Currently, to start going up, the price needs to close above 255.995p whereas, if it intends self-immolation, closure below 200.705p will justify panic.

But for now, the price is bumbling along exhibiting Mr Bean tendencies, ignoring whatever is going on around it. Movements on Monday 30th intraday were irritating, constantly teasing that the price wants to visit a boring 212p.

The problem we have is, intraday trades below 212p will suggest a coming nod in the direction of 202p and a probable challenge of the red line.

Only if 'red' breaks do we become alarmed as, until such a point, we're actually fairly optimistic on this share. But a break of 'red' allows the low 180's to make a guest appearance.

However, from a Big Picture perspective, the share is now trading above the downtrend since 2007 and this is normally a good thing. The value would require shrinking below 200p currently to slither below this particular trend, once again embracing the dark side.

Or, in other words, should 202p make an appearance anytime soon, we now have two distinctly different reasons to anticipate a reasonable bounce.

But given Barclays is currently trading on the right of a big picture downtrend and there's absolutely no political upheaval in the world, what does the share need to achieve to suggest growth will occur without 203p being troubled?

Currently trading at 223p, the price needs better than 235p to convince us it's seen bottom on the immediate cycle.

Above 235p should trigger growth now to an initial 242p with secondary, if bettered, at 254p.

In fact, we already regard this as heading to 254p as it needs below 202p to spoil the calculation. And this takes us back to our initial waffle about the ruling trends - the dark blue downtrend since 2013 will be around the 254p level at the middle of February.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.