The technical picture of the Renaults SA stock (EPA: RNO) on our 4-hour chart shows that, currently, the share price is declining. That said, RNO continues to balance above a short-term upside support line taken from the low of May 20th. Although the price may drift a bit further south, as long as it stays above that upside line, we will remain positive, at least with the near-term outlook.
A small decline could bring the stock closer to the aforementioned upside line, which if holds may attract new buyers into the game. If so, RNO could travel back to the 36.28 obstacle, or to the current highest point of June, at 37.50. Initially, the upmove may get halted around there, but if the buying action is still strong, a break of the 37.50 barrier would confirm a forthcoming higher high, potentially setting the stage for a further move north. That’s when RNO may get driven to the 38.17 obstacle, or towards the 39.07 level, marked by the highest point of April.
The RSI is currently flat and sits fractionally below 50. The MACD, although pointing slightly to the downside and sitting below the trigger line, remains well above zero. The RSI is showing slightly negative price momentum, which is in line with the idea of seeing a further correction lower. The MACD is still in positive territory, meaning an upmove in the near term could still be possible, which supports the scenario of staying positive overall.
Alternatively, if the aforementioned upside line breaks and the stock falls below the 34.75 hurdle, marked by an inside swing high of June 8th, that may spook new buyers from entering for a while. The share price could then slide to its next possible support area at 34.00, or to the 34.16 levels, marked by the lows of June 4th, 7th and 9th. Slightly below it sits the inside swing high of May 25th, at 33.48, which may also get tested. If there are still no new buyers around that price, RNO might continue with its journey south, possibly targeting the 33.08 hurdle, or even the 32.58 level, marked by the low of May 26th.
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