Overall, the Distribuidora Internacionale de Alimentacion stock (BME: DIA) continues to trade below its medium-term downside resistance line drawn from the high of May 21st. But after hitting its all-time low, at the 0.13-euro mark in the first half of November, the stock of a major Spanish discount retailer started picking up interest among investors again, especially after yesterday’s move higher, when at one point, the share price gained over 90%. However, it lost a larger portion of it by the end of the European trading session. Nevertheless, it ended the day with a decent gain of 20%. Today, DIDA (DIA) continues its journey up and from the technical side, we can see that it is breaking the 0.21 barrier again. For now, we will stay somewhat positive and aim for a slightly larger correction up, as let’s not forget that on a bigger picture, the stock is still balancing below a downside line.
If today we get a daily close above the aforementioned 0.21 hurdle, which is the high of October 31st, this might interest a few new buyers next week to join in and drive the price higher, possibly targeting the 0.29 barrier again, which is yesterday’s high. Initially, we could see the stock stalling around there, but if the buying interest is still there, this could lead to a break of the 0.29 obstacle and a further push up. We will then aim for the 0.40 level, marked by the lows of October 23rd and 28th.
Judging from our oscillators on the daily chart, the RSI and the MACD, both started pointing higher. This gives a bit more hope for investors that the stock may end up moving further north. That said, one should still remain cautious, as the RSI is still below 50 and the MACD is below zero, although it climbed above the trigger line.
Alternatively, if the price slides back below the 0.18 hurdle, which marks the highs of November 4th, 5th and 6th, this may spook new investors and the stock could drift to its all-time low, at 0.13, again. If this time that support area is not able to withhold DIDA (DIA), this may result in a break, leading it towards new all-time lows.
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