The technical picture of the Bayer AG (ETR: BAYN) stock shows that, since the reversal to the upside at the end of October, the stock started forming higher lows and higher highs. Today, the share price exploded higher, resulting in a break above last week’s high, at 44.15, and above the high of October 19th, at 45.14. All this happened after Pfizer Inc. (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX) came out with the news that their vaccine trials showed around a 90% success rate, which might help fight the current pandemic. For now, we believe BAYN has a good chance of drifting a bit more to upside, at least in the near term.
A move higher could bring BAYN to the 47.14 hurdle, marked near the highs of October 6th and 9th. That’s where the stock might stall for a bit, or even correct slightly lower. If so, the share price may move to the 45.14 zone again, or to a short-term upside support line drawn from the low of October 30th, which might provide additional support. If all that area continues to provide a good hold-up, we might see a rebound, possibly bringing the share price to the 47.14 territory again, a break of which could clear the way to the 48.49 level, marked by the highest point of October.
The RSI and the MACD on our 4-hour chart are showing positive price momentum, as both indicators continue to point higher. The RSI currently sits comfortably above 50 and the MACD is above zero and its trigger line.
Alternatively, if the aforementioned upside line breaks and the share price moves below the low of November 6th, at 42.52, that may spook potential new buyers from the arena. BAYN might then drop to the 41.91 obstacle, or to the 40.60 area, marked by the low of November 3rd. However, if the slide doesn’t stop there, the next possible target might be the current lowest point of this year, at 39.87.
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