Barclays’ share price is rebounding today as part of a broader rally among UK banks. The stock has risen by over 4%, making it the third-best performer in the FTSE 100, following HSBC Holdings and Standard Chartered. Other banks, including NatWest and Lloyds, are also seeing sharp gains today.
Barclays and other UK banks are recovering after a rough start to the year, with most experiencing declines in the first two trading days of the week. Today’s rally is partly driven by a shift towards industries that many investors now view as undervalued.
However, Barclays still faces several challenges. Its consumer business may struggle as the UK navigates its current lockdown. Additionally, its US operations could face difficulties as it appears Joe Biden may gain more congressional support, which could impact certain sectors.
On the positive side, Barclays’ share price has some advantages. It remains about 20% below its highest point from last year, making it an attractive option for some investors. Furthermore, the bank’s trading division could continue performing well, as it did last year. Additionally, its UK business may benefit from strong lending growth.
On the daily chart, Barclays’ share price has been trading sideways, forming a horizontal channel highlighted in purple. Today, the stock has moved toward the upper side of this channel and is slightly above the 25-day and 50-day moving averages, as well as the 61.8% Fibonacci retracement level.
If the stock breaks above its current resistance, it could continue rising, with the next target being the 78.6% retracement level at 166p.