From the technical side, we can see that in the beginning of February, the Pernod Ricard SA stock (EPA:RI) exited a falling channel through the upper bound and made its way higher. In mid-February, the stock found resistance near the 166.45 barrier and reversed south again. Although the share price is currently seen drifting lower, it still remains above the aforementioned falling channel and above a medium-term tentative upside support line drawn from the low of April 27th, 2020. Even if RI moves a bit more to the downside, as long as it continues to trade above that upside line, we will stay positive with the overall outlook.
A small decline could bring the share price to the 156.10 territory, marked by the current lowest point of March. Slightly below it is the upper side of the previously-discussed downside channel and the aforementioned upside line, which also could provide a hold-up. If so, new buyers might step in and drive RI higher. We will once again aim for the 159.40 obstacle, or for the 163.15 barrier, marked by the current highest point of March. If that barrier fails to withstand the bullish activity and breaks, the next potential target might be the 166.45 level, which is the highest point of February.
Both the RSI and the MACD are currently flat, with no clear indication of direction. The RSI continues to oscillate around 50 and the MACD is near zero, while sitting fractionally below its trigger line. The lack of directional move on our indicators forces us to look for other technical methods to establish the next directional move of price, one of which is discussed above.
Alternatively, if the stock falls back inside the previously discussed channel and also breaks the aforementioned upside line, this could spook new buyers from the arena for a while. The downside scenario might strengthen if the share price falls below the 152.65 hurdle, marked near the low of December 21st and the low of January 28th. Such a move may open the door for a move to the lowest point of January, at 150.85, or to the 148.30 zone, marked by the high of November 6th and the low of November 9th. If there are still no new buyers in sight, RI could end up falling all the way to the 146.00 level, marked by the highs of October 27th and November 4th, and also by the low of November 6th.
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