Tesco share price was on its second day on the rise, as it gained 0.76% in 24 hours to trade at 271.95. This gave renewed hope of a sustained price rally heading into the winter.
Last month, Tesco reported earnings that exceeded experts’ expectations. Going forward, it is widely expected that supply chain disruptions won’t be a challenge.
Christmas shopping and Covid-19 to support sales
The current momentum is likely to propel the price higher as we approach the peak Christmas shopping season.
Tesco’s ( LSE:TSCO) shareholders will be hoping for a repeat of the scintillating bull run experienced between late July to early September. News of £ GBP 500 million share buyback by the company in mid-October has so far not stirred up investors as expected. Nonetheless, this is a significant purchase whose effects will ultimately be felt in coming days.
In addition, all the 19 analysts at City have all given a bullish view of the Tesco shares. Tesco has also recently reported that the Covid-19 pandemic is still driving up sales. With the UK recently announcing a spike in infections, the retailer’s sales are likely to soar due to the combined effect of the pandemic and Christmas shopping.
Technical analysis for Tesco share price
Tesco share price momentum is on a recovery path after its RSI dropped from 63 to 51 over the last one week. At the time of writing, the momentum has picked up pace and the RSI is at 58. This signals that the market is increasingly becoming bullish. If the bulls take control, they are likely to push the price up marginally to encounter the first resistance at 273p.
Beyond that point, the next resistance could come at 275.55p. However, the momentum is likely to result in a near-equilibrium between the bulls and the bears, resulting in range trading. On the lower side, the first support is likely to be at 270.10p, and the second support at 267.90p.
