Tesco shares technical analysis: Range-bound trading as buyers retain control above support

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Tesco slips 0.04% to GBX526.2 today

Highlights

Tesco raised its annual forecast after adjusted operating profit rose 6.5% to about €2.11 billion.
Tesco stockholder returns increase with a €237 million share buyback program extension, reducing float and returning capital.
Shares of Tesco remain in a bullish trend with 75% probability of trading in the GBX514.3 to GBX538.1 range over the next few days.

Profit growth and buyback extension drive outlook upgrades

Tesco raised its annual forecast after reporting a 6.5% increase in adjusted operating profit to approximately €2.11 billion, reflecting stronger business momentum. This confirmed profit growth enables the company to adjust expectations higher, improving the outlook for future profitability and supporting valuation. Additionally, Tesco announced an extension of its share buyback program by £200 million, or about €237 million, enhancing shareholder returns through reduced float and increased capital return.

Bullish momentum persists despite overbought signals and pullback risk

The MA-20 and MA-50 on the H1 chart remain below the price, while the daily MA-200 sits well below, confirming strong technical support. Immediate support is indicated by the Ichimoku Kijun at GBX517.2, with the next resistance seen at GBX538.1. Momentum readings show a mixed but generally bullish setup: MACD and ADX signal strong buying, with Bull/Bear Power and CCI confirming that buyers are in control. However, RSI at 79.34 highlights an overbought state, and Stoch RSI flashes a strong sell, signaling the risk of a short-term pullback even as the Awesome Oscillator points to continued buyer dominance.

Sideways bias dominates as breakout risks shape short-term outlook

Over the next two to three trading days, TSCO is expected to trade within a band of GBX514.3 to GBX538.1—a volatility band relative to current levels. The baseline scenario favors sideways to moderately higher price action within this corridor. A breakout above resistance could trigger new highs, while a drop below immediate support would raise the risk of a deeper retracement, although this remains less likely given current technical setup.

Anton Kharitonov, expert at Traders Union, sees Tesco’s price action as resilient but likely to pause after recent gains. He notes the fundamentals remain supportive, thanks to profit growth and the expanded buyback program. However, technical signals flag overbought risks and argue for caution short term. "Until GBX538.1 is clearly broken, I prefer a neutral stance and would avoid chasing upside here."

In a recent review, analysts highlighted Tesco's robust operational performance and positive technical outlook, positioning the stock as a resilient retail sector pick. The latest profit upgrade and expanded buyback program reinforce this narrative, with sustained technical strength and a tight trading band suggesting that traders should closely monitor any breakout above GBX538.1 for a potential new upside move.

Source of Data: TSCO Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.