Liberbank SA (BME: LBK) is a relatively small retail bank in Spain, established in 2011, with less than 4000 employees registered currently. The bank was created through a merger of a few financial institutions, which later took the name of Liberbank. Currently, the market capitalisation of the bank is around USD 650mln, comparing, for example, to Banco de Sabadell’s SA (BME: SAB) USD 1.83bn, which has a similar stock price. Liberbank main operation is in the northern, western and central Spain. Although the bank is considered to be small, it still might be of interest for those, who likes to monitor “Penny stocks”.
The technical picture on our daily chart of LBK shows a surge, which happened in the beginning of August. The price went all the way to its 200-day EMA, found resistance there and started correcting lower. This move lower might have formed a potential bullish pennant, or a falling wedge pattern. In any case, both formations are considered to be positive, according the Technical Analysis rules. That said, until the break of the upper side of that wedge happens, we cannot get comfortable with examining higher areas. For now, we will take a neutral stance.
Eventually, if the share price breaks the upper side of the falling wedge and climbs above the 0.2400 barrier, marked by the high of August 25th, that might open the way towards higher areas. The stock may then travel to the highest point of August, at 0.2515, a break of which could clear the path towards the 0.2635 zone, marked by the low of March 5th. LBK could stall there temporarily, however, if the buyers are still interested in the stock at that price, that might lead to a further uprise, potentially aiming for the 0.2768 level, which is the high of March 4th.
The RSI is pointing lower, at the moment, but remains above 50. The MACD is also pointing slightly lower and running below its trigger line. That said, the indicator is still sitting above zero. Both indicators are showing slightly decreasing upside price momentum, which may come in line with the idea mentioned above.
On the downside, if the share price suddenly falls below the lower side of the aforementioned wedge, that could send the stock further south. It may then travel to the 0.1946 hurdle, a break of which might set the stage for a test of the 0.1778 zone, marked by the highest point of July. Slightly below it runs a medium-term tentative upside support line taken from the low of March 19th, which could halt the slide. If so, this whole move down might be considered as a temporary correction before another leg of buying.
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