Lloyds share price gains steam as Wall Street banks stumble

Lloyds (LON: LLOY) share price has been in a strong bullish trend in the past few months. It surged to a high of 50p, which was the highest level since March 29 2022. It has surged by more than 30% from the lowest point in 2022 as the bank earnings season continues.

Bank earnings season

Lloyds Bank Group has staged a strong recovery in the past few months even as American banking giants publish weak Q4 numbers. Last week, JP Morgan said that its credit loss provisions jumped by 40% in Q4 as the company braced for a mild recession. 

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Other giant banks like Goldman Sachs, Citigroup, Bank of America, and Wells Fargo added millions of dollars in provisions. They also said that their net income crashed by more than 40% year-on-year. Most of them attributed this to loss provisions and a sharp decline in investment banking.

Lloyds Bank is expected to be going through a challenging period as well. However, unlike Barclays, the company is a bit immune because the company does not have a major role in investment banking and wealth management.

The main challenge is that the company is exposed severely to consumer and corporate lending. As such, analysts expect that the bank will publish more credit loss provisions in its upcoming results. It allocated more than 668 million pounds in provisions in Q3. That was higher than the 200 million pounds that it allocated in Q2. 

Another challenge for Lloyds share price is that the company is expected to suffer from the housing market. In a report on Tuesday, Lloyds said that it expects that home prices in the UK will drop by 10% in 2023, the worst performance in years. This is notable because Lloyds has a substantial market share in the housing market. Lloyds will publish its full-year results on February 22 of this year.

Lloyds share price forecast

The daily chart shows that the LLOY stock price has been in a strong bullish trend in the past few weeks. It managed to move above the important resistance level at 47.43p, the highest point on November 28. It has jumped above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) and Stochastic Oscillator have continued rising.

Therefore, the shares will continue rising as buyers target the next key resistance level at 55p. A drop below the support level at 48p will invalidate the bullish view.