The Tesco share price has been hovering over this year’s high for the past two weeks. The TSCO stock has jumped nearly 11% since the start of August. Other British retailers like Sainsbury’s and Morrisons have also advanced in the past month. Tesco’s total market capitalization currently stands higher at £19.92 billion.
Tesco is the world’s third-largest retailer measured by gross revenues. It is also the largest retailer in the United Kingdom, closely followed by Sainsbury’s. The Tesco share price has rocketed nearly 20% from its lowest point this year in March.
The TSCO share price has been in the limelight in August following the bidding of acquiring Morrisons. Tesco’s former boss, Sir Terry Leahy, the current CEO of Morrisons, had been in the lead in the race to buy the company. However, Morrison’s got a higher bid from Clayton, Dubilier & Rice (CDR), a giant private equity firm.
Analysts also linked Tesco’s rally to the ongoing speculations of Sainsbury’s buyout interests. There were rumors that Apollo Global Management, a private equity firm, could launch bids for Britain’s second largest supermarket chain.
Investors believe that Tesco could become an acquisition target due to its modest valuation compared to its American competitors like Amazon. They also expect the company to maintain its growth as the UK economy reopens.
Investors will be closely watching the UK retail sales for August, which are likely to impact the company’s share price. The Retail sales are scheduled to be released later, on September 17.
The daily chart shows that the Tesco share price has been on a strong rally for the past few weeks. At the time of writing, it was up 0.77% at 257.10p.
It has moved above the 25 and 50-day exponential moving averages. It has also moved above the 50-day moving average, hinting at a bullish turn.
Therefore, the TSCO share price is likely to continue rising as bulls target the next key resistance at 270p. On the flip side, this view will be invalidated if the price moves below the support at 240p.