Looking at Iberdrolas’s stock (BME: IBE) from the technical side, we can see that after forming a double top, the price started sliding, which led to a break of its long-term upside support line taken from the low of October 15th, 2018. In addition to that, the stock is now trading below a short-term downside resistance line drawn from the high of October 1st. If IBE continues to trade below that line, it has got more chances to continue drifting further south. That said, before we could get comfortable with lower levels, at least in the short run, we will wait for a daily close below the low of last week, at 8.77, hence why we will stay cautiously-bearish for now.
As mentioned above, a drop below the 8.77 hurdle would confirm a forthcoming lower low and more investors could be liquidating some of their positions, which may result in the price moving to the 200-day EMA, or the 8.50 zone, marked near the lows of July 10th, 12th and August 1st. Initially, the stock might stall around there, but if there are still not enough new buyers of IBE at that price area, the slide may continue and the next potential support level to consider could be near the 8.33 mark. That level is the lowest point of July.
On the other hand, if the aforementioned downside line breaks and the price climbs above the 9.02 barrier, marked by the lows of October 16th, 21st and 22nd, this might push IBE further north, as more buyers could be joining in. This is when we will examine a possible test of the 9.26 obstacle, a break of which may clear the path to the 9.46 level, which is the high of October 8th.
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