DAX Index
Lloyds share price is trading lower at 0.44% at the time of writing following a bullish start to the day. Within the hour, investors began to sell the stock after learning that the bank has widened the scope of the compensation it is paying out to victims of the HBOS Reading scandal following pressure mounted by campaigners.
Lloyds had initially paid out £102m, but a review found that the initial compensations had “serious shortcomings”. Victims mounted a nearly 10-year legal challenge, and it appears they have finally got their wish.
Lloyds bank acquired HBOS in 2009. The HBOS debacle, which saw a group of bankers defraud small businesses and lavish the proceeds on luxury items, holidays and escort services, has now cost the bank £245million in compensation payments. These must be accounted for when the bank releases its next quarterly result in November. Experts estimate that Lloyds may have to pay out a total of £500m when the compensation payouts are done and dusted. Several bankers and advisers are serving time for the fraud which occurred between 2003 and 2007.
After a bullish start to the day, sellers came into the fray and forced the daily candle off intraday highs at 27.67. This rejection coincides with a rejection from the 27.47 resistance line, forming a new lower high from the peaks of 7-9 October.
Traders may need to wait to see the price reaction at the channel’s upper boundary. A bounce on the upper border may allow for a retest of 27.47. Clearance of this area to the upside could target 29.76, if the price move can scale the short-term peak at 28.76 (28 August and 7-9 October highs). Prior highs at 13/21 July at 31.25 await buyers if they can force prices above 29.765.
On the other hand, a decline below the channel’s upper edge allows for further bearishness towards 25.875 and possibly 24.745, with the price trough of 24 September awaiting sellers at 23.930 if the decline continues.
