Important levels for Metro Bank

Monday, 22nd July 2019 11:47 - by Rajan Dhall

Metro bank today announced this morning they are looking at selling their loan portfolio but have commented: "There can be no certainty at this stage that an agreement will be reached". 

This is said to be the same loan portfolio that landed them in hot water due to the miscalculation of their assets.  

In January, a major loan book error left a hole in the bank's balance sheet and subsequently wiped more than £1.5 billion its market cap. It has now been said that the U.S hedge fund Cerberus Capital Management is now interested in buying GBP 500mln book back. Some analysts have speculated that the news could be released on Wednesday when it released its results. 

This morning shares in the bank are up 6% and have rejected the 500p level. Looking at the daily chart below there has been a massive build-up in volume between the 500 and 900p area. This could be the key break out point if a deal can be reached and normal service is resumed. Following that break 1500p is the next very important level along with the downward sloping trendline. A break of both of these could a confirming factor that the share price could be in recovery mode. In the near term, 588p is also an important resistance level and could indicate some upside momentum. 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.