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Barclays (BARC) 486p

The bank gained more than 23% in the past three weeks, and ended the banks’ reporting season at the top of the pile thanks to the relatively modest size of its asset write-downs and a good result at the investment banking arm. But it still seems too soon to bet on a full recovery of the sector as, effectively, it isn’t clear yet how the credit crunch is to be beaten. Banks must be more selective in their lending, meaning at the least their books, if not their profits, will shrink. Barclays’ recent share price gains have to be put in perspective with the strong rally of the whole London market, as the FTSE 100 hit 6,000 last Monday (7 April). Also, many technical analysts suggest Barclays’ chart shows some bearish signs, as a downward trend is in place. Christian Blaabjerg, strategist at Saxo Bank, says: ‘It is only a matter of time before the banks get hit in another wave of write-downs due to customers (either corporate or private) not being able to pay their loans.’ We suggest selling into strength with a stop loss at 512p.

ACTION: SELL Barclays • Target 435p • Stop loss 512p

TIME TARGET: 5 WEEKS