From the beginning of August 2019, the Bayer AG stock (ETR: BAYN) continues to move higher, while trading above a medium-term tentative upside support line taken from the low of August 6th. But after hitting resistance near the 76.96 barrier, the share price moved slightly lower and it seems to be making its way towards that upside line. As long as the upside line stays intact, we will stay positive and aim higher.
A small throwback below the 73.20 support area, which is the current low of this week, could lead to a test of the aforementioned upside line. If that line is able to withstand the pressure, the buyers could see it as a good opportunity to take advantage of the lower price, it may help BAYN to moved back, not only to the 73.20 hurdle, but also to the current high of January, at 76.96. If the buying doesn’t stop there, a break above that hurdle would confirm a forthcoming higher high and could set the stage for a drift to the 79.95 level, marked by the highest point of October, 2018.
Looking at our oscillators, the RSI and the MACD, we can see that both have recently declined a bit, which may come in line with the above-mentioned idea of a small correction first, before another leg of buying. Although the RSI has moved a bit lower, it still remains above 50 and points slightly higher. The MACD, despite moving below its trigger line, continues to run above zero, which still gives the potential new buyers hope that not all is lost.
Alternatively, if the previously-discussed upside line breaks and the share price falls below the 70.34 zone, which is the lowest point of January, this may spook some new buyers from entering, as such a move would increase the stock’s chances of moving further south. That’s when we will aim for the 67.03 obstacle, a break of which could clear the path to the 64.24 level, marked by the low of October 23rd.
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