Winds of change are blowing

HSBC (LON: HSBA) share price has staged a strong recovery since November as the company goes through significant changes. The stock rose to a high of 520p, which was the highest level since September 23rd. It has risen by more than 18.67% from the lowest level in November. In total, the stock rose by 3% in 2022, making it one of the best-performing bank stocks. 

Winds of change are blowing

HSBC is one of the biggest banks in the world – number 7 to be precise. It has over $2.9 billion in assets and over 226k employees globally. The company, which has UK roots, makes most of its money in Hong Kong and is continually growing in mainland China. 

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HSBC has been in a transformation journey in the past few years. As part of this journey, the firm has sold some of its less profitable franchises. It sold its American retail bank to Citizens Bank. It also sold its French retail banking business to Cerberus Capital. And most recently, HSBC announced a deal to sell its Canadian business to RBC. 

HSBC’s management believes that these disposals will leave a bank that has strong operations in China and the UK. It is the second-biggest bank in the UK by assets after Lloyds.

HSBC is also battling impatient investors, led by Ping An Insurance, have called for the bank to break itself apart. Precisely, the insurance giant believes that the company will unlock more shareholder value if it separates its China and UK businesses.

By separating its businesses, the insurance company argues that HSBC will be able to boost returns. It will also help investors select the bank they want to own.

Another wind of change is the company’s rising costs on technology. The firm’s costs rose by 5% in $7.3 billion in the last quarter. These investments will likely pay off in the next few years. 

HSBC share price forecast

The daily chart shows that HSBC stock price has been in a strong bullish trend in the past few weeks. The stock moved above the 25-day and 50-day moving averages, which are about to make a bullish crossover. It has also moved above the Ichimoku cloud while the Relative Strength Index (RSI) moved close to the overbought level.

Therefore, the stock will likely continue rising as buyers target the September high of 560p. A drop below the support at 480p will invalidate the bullish view.