After the March 2020 sell-off, the Valeo stock (EPA: FR) continues to recover, while trading above a medium-term tentative upside support line taken from the low of March 18th. Last week, the share price made a big jump, overcoming some key resistance areas, last time tested in September. This week, FR is still struggling to go above the highest point of last week, at 31.50. Although the current medium-term trend is to the upside, we would prefer to wait for a break above that 31.50 barrier first, in order to get a bit more excited with higher areas.
A strong push above the 31.50 hurdle would confirm a forthcoming higher high and may attract more investor interest. The stock could end up moving to the 32.93 zone, marked by the current highest point of this year. FR may stall there for a while, or even retrace back down a bit. That said, if the share price remains above the previously discussed 31.50 area, new buyers might take advantage of the lower price and jump into the action. If so, the stock may rally again, possibly overcoming the 32.93 obstacle and targeting the 35.16 and 35.69 levels, marked by the highs of December 13th and 9th respectively.
Although the RSI and the MACD are currently on the flat side, both indicators remain in the positive territory. The RSI is above 50 and the MACD is above zero and its trigger line. This comes in line with the idea of aiming higher overall, but waiting for a confirmation break above the 31.50 hurdle first.
On the other hand, if FR suddenly drops heavily below the aforementioned upside line and then below the 26.35 zone, marked by the low of November 6th, that could halt new buyers from entering any time soon. The stock might then travel to the 24.79 hurdle, or even to the 23.24 area, marked by the lowest point of October and the inside swing high of August 6th respectively. If there are still no new buyers in sight at that the last-mentioned price, this could result in a further decline, possibly bringing the share price to the 21.37 level, marked by the lowest point of August.
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