Since around May last year, the Banco Santander stock (BME: SAN) was in a sliding mode, forming lower lows. But from December, we noticed that the price had stabilized somewhat and the stock started consolidating. SAN is now forming higher lows, which might be seen as a positive among investors and help the stock to travel higher in the near term. For now, we will take a cautiously-bullish approach and wait for a confirmation break first, before getting comfortable with higher areas.
The Banco Santander stock is currently balancing around its 200 EMA and above a short-term upside support line taken from the lowest point of December. If the price continues to accelerate, then gets above the 200 EMA and breaks above the 4.522 barrier, marked by the March high, this is when more investors could start joining in. At the same time, such a move would confirm a forthcoming higher high and open the door to the next potential resistance zone, at 4.635, which held the price down in September last year. If this time this area is no match for the bulls, a break of it could attract even more buyers and clear the way towards the 4.858 level, marked by the highs of June 12th and July 31st.
Taking a quick glance at our oscillators, the RSI and the MACD, both seem to be in support of the above discussed idea. The RSI is above 50 and points to the upside. The MACD remains above zero and recently shifted back above its trigger line. The indicator is also pointing higher right now.
Alternatively, in order to examine the downside again, we would like to see a break of the previously-mentioned short-term upside support line and a price-drop below the 4.080 hurdle, which marks the lows of March 26th, 27th and 28th. This is when we could see SAN sliding further and potentially hitting the 3.941 support obstacle, a break of which could increase the chances for a re-test of the December low at 3.800.
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