Tesco share price returned to the upside on Tuesday, bumping up by 1.1% to trade at GBX 382. The stock has been on a general uptrend in recent weeks, and has gained 2.3% in the last month. In addition, it is up by 3.4% year-to date, underlining a bullish-leaning momentum.
Escalating global trade tariff war has put pressure on equities, especially those exposed to the US market. However, Tesco (LSE: TSCO) does not have any store in the US, having closed shop in 2013, and this augurs well for the company.
US President Dinald Trump and UK Prime Minister Keir Starmer held talks in February, and trade relations between the two allies was a central focus. However, nothing definitive has been pronounced since then, with Trump expected to honour an invitation to an unprescedented second state visit to the UK. That could keep some investors on the edge, especially considering that Trump has been seen as high-handed against a key ally like Canada.
Despite its strong show in recent weeks, Tesco share price is marginally below its daily Volume Weighted Moving Average (VWMA), which stands at GBX 383 as of this writing. This shows that the upside momentum is not as strong, and a break below the five-week support level of GBX 375 could signal the onset of a reversal.
Tesco Share Price Prediction
On the chart below, the momentum on Tesco share price pivots at GBX 380 and the upside will prevail if action stays above that level. The stock will likely meet the first resistance at GBX 384, but an extended control by the buyers could break above that level and potentially test GBX 389.
Alternatively, breaking below GBX 380 will shift the momentum to the downside. That is likely to see movement towards the first support at GBX 376. The upside thesis will be invalid if the price breaks below that level. Also, an extended control by the sellers could take Tesco share price lower to test the second support at GBX 372.
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