The German cash and carry giant, Metro AG (ETR: B4B), had also felt the economic downturn in the beginning of this year. The stock sold off heavily, but stabilized in the range roughly between the 8 and 9 euro marks. However, despite getting hit in the beginning of the year, the company still manages to keep a steady operational flow and even make acquisitions outside of Germany. The German wholesaler continues its expansion by opening stores in major Asian countries, such as India and Pakistan. Not only that, Europe remains one of the biggest markets for Metro AG, as it was seen by the recent acquisition of the Portuguese Aviludo Group, which is the second-largest food distribution company in Portugal. That said, the Iberian-peninsula company is expected to keep its own brand, for now.
Looking at the technical picture of the B4B stock, we can see that it continues to get squeezed, as it remains between two of its medium-term lines, a downside one drawn from the high of June 9th and an upside one taken from the low of April 16th. For now, we will take a neutral approach, as we wait until one of those lines gets violated, before we examine the next directional move.
If, eventually, the stock breaks the aforementioned downside line and then rises above the current highest point of November, at 8.61, that may attract more buying interest, as something like that might open the door for a move to some higher areas. The next possible target could be at 9.05, which is the highest point of September. Slightly above it lies another possible resistance area, at 9.29, marked by the highest point of June.
Both the RSI and the MACD are currently flat on our daily chart. This supports the above discussed scenario of waiting for a breakout.
Alternatively, if the stock moves lower, violates the previously mentioned upside line and drops below the 8.08 hurdle, marked by the lowest point of September, that could spook new buyers from entering any time soon. B4B may then drift to the lowest point of August, at 7.60, a break of which might clear the way to the 7.20 zone, or the 7.08 area. The two levels mark the lowest points of May and April respectively.
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