HSBC reported earnings last week that disappointed investors, and unfortunately things have not got any easier for the British bank which is now the central focus of a tax evasion scandal. Given the recent negative public sentiment towards the company, Joe Neighbour from Central Markets is looking to short the stock.

Investigators claim that the bank’s Swiss branch aided clients in avoiding paying taxes. The bank’s Swiss division is currently under investigation by several countries including: France, Belgium, Argentina, Switzerland, and India. HSBC’s Chief Executive acknowledged the damage that this scandal has caused saying, “It clearly was unacceptable, we very much regret this and it has damaged HSBC's reputation”.

Joe is planning to sell shares of HSBC around the key resistance level of GBP 5.87. His two targets for the trade are GBP 5.66 and GBP 5.10. A stop can be placed at GBP 6.13.

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