At the end of March, we saw Bayer AG stock (ETR: BAYN) taking another strong hit, which led the share price to drop around 15 dollars. The company’s stock remains risky for investors, who are still spooked by the ongoing scandal over one of the Bayer’s units, Monsanto, which sells a weed-killing chemical that is used in agricultural and across various other industries. The chemical is feared that it could cause cancer to its users. After a court ruling against the company in August 2018, the stock took a nose dive and sold off heavily.
From the technical side, after finding support just slightly below the 55-dollar price tag, the stock rebounded and got back above its December low, around the 58.30 area, which now becomes an important level to watch. In the very short run, BAYN could travel a bit higher, but there are some strong obstacles on the way higher, which may result in a short-lived upmove.
A push back above the 61.47 barrier, marked by the high of March 22nd, could invite more short-term buyers, who could try and lift the stock to its next potential strong resistance zone, at 63.01. This zone is the high of March 20th, which is just slightly below the stock’s short-term downside resistance line taken from the high of March 6th. If the share price struggles to rise above the 63.01 level, or that downside line, this might be a sign for those short-term buyers to jump off the stock, which may result in BAYN sliding back down. This is when we will look into a potential re-test of the 59.18 hurdle, or even the 58.30 support area, which is December’s low.
Alternatively, if the previously-mentioned downside line gets broken and the price rises above 65.12 barrier, marked by the low of February 15th, this could give hope to potential BAYN investors, as it could increase the chances for the stock to move further north. We will then look into the possibility for the stock to re-visit the 66.43 obstacle, a break of which could open the door to a bigger uprise. The next potential target then could be the 69.95 level, which is the high of March 19th.
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