L’Oreal SA stock (EPA: OR) already gained around 19% from the beginning of this year. But after hitting an all-time high at the 245.50 level last month, the share price had moved a bit lower. The price is still balancing above the 237.10 hurdle, which acted as a strong support zone from the beginning of April. Lately, the stock struggled to overcome its highest point and, in our view, OR is losing its interest among investors at that price, which may result in the stock retracing back down in the short-run.
If the 237.10 barrier fails to withhold the stock from sliding further, this might increase its chances of hitting the 233.50 area, marked by the low of March 25th. Even if then, there are no much buyers at that price, OR could take another beating and move lower. This is when we will examine the 226.80 support zone, which is the highest point of February.
Looking at our oscillators, the RSI and the MACD, both are showing signs of slowing down. The RSI is on a downslope and is hitting 50 from above. The MACD is showing us clear negative divergence. Also, the indicator is below its trigger line and points to the downside.
On the other hand, in order to consider higher levels at least in the near term, we would like to see a clear break and a close above the recently established all-time high, at 245.50. This way the stock would confirm a forthcoming higher high, as it would also enter the uncharted territory. We might then target areas around the 250 and 255 levels.
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