The technical picture on the Danone stock (EPA: BN) suggests that the share price has opened the door to some higher price levels, after breaking the medium-term downside resistance line taken from the high of August 30th. The share price has a good chance to continue drifting higher, especially if it gets above yesterday’s high. For now, we remain somewhat positive over the near-term outlook and will aim higher.
As mentioned above, a push above yesterday’s high, at 65.35, could interest more investors to join in the action and drive the stock further up. This is when we will target the 66.70 barrier, as the next potential resistance. That area held the price down throughout the whole of November 2018 and didn’t allow the stock to rise further. We may see a hold up this time as well, but if the buyers remain convinced that BN has value even at that price, the stock may surge once again and test the 67.49 level, marked by low of October 3rd.
At the time of this analysis, our oscillators suggest that there might be some more upside left, which supports the above-discussed idea. The RSI is above 50 and keeps on pointing higher. The MACD is in the positive territory, remains above the trigger line and also points to the upside.
Alternatively, a break back below the aforementioned downside resistance line and a price-drop below the 64.25 hurdle could confirm a forthcoming lower low, which may force the stock to slide even lower. This is when we will look into the possibility of a re-test of the 63.62 obstacle, which marks the high of January 21st. If BN continues to experience weakness, then the share price could depreciate even further, where the next potential support zone might be seen near the 62.95 hurdle, which is the low of January 31st.
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