One of the world’s first and oldest automaker’s stock has been trading in downtrend for quite a while now. We are talking about the Daimler AG shares (ETR: DAI), which, from the end of April, have dropped significantly. That said, the stock is still in the positive territory for the year, but it might not be like that for too long, given that DAI had broken through the lower side of the short-term rising channel formation. That channel was in play from the last trading days of May up until today, when the stock opened with gap down and outside of the channel. For now, we will take a somewhat bearish stance and aim for slightly lower areas.
A push further down and a break below the 47.21 hurdle, or even the 46.73 mark, which is the low of June 18th, could spook new investors from entering, as the price may continue drifting lower, aiming for the lowest point of May, at 45.70. This is where the big battle might start. Some current investors might see it as a good level to enter again, but others may be more fearful, as it would be unclear if the stock could rebound from that area and push higher. If there is still more scepticism about the DAI’s upside potential at that level, a price-drop below the May’s low and this year’s opening price, at 45.51, could send the share price into another freefall and possibly test the 44.51 mark, which is the lowest point of January.
Our oscillators, the RSI and the MACD, support the idea of a potential further slide in the short run. The RSI is below 50 and continues to point lower. The MACD has just recently fallen below zero, where the indicator continues to sit below the trigger line and to point lower.
Alternatively, a strong reversal to the upside and a push above both, the lower side of the rising channel pattern and the 48.20 barrier, could invite new investors into the game again. This is when the price might start accelerating again and making its way to the 49.59 obstacle, a break of which could lift the stock a bit higher, to test the 50.21 area, marked by the high of July 1st. Initially, we may see DAI stalling around there, or even correcting slightly lower. But as long as the price remains above the lower side of the rising channel pattern, we will stay somewhat positive, at least over the short-term outlook. If the 50.21 hurdle eventually surrenders to the buyers, the next possible resistance zone could be seen near the 50.90 level, marked by the low of May 22nd.
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