After yesterday’s strong reversal to the upside, today, the stock of Telefonica SA (BME: TEF) continues to climb higher. The price reached and slightly overshot one of its key resistance areas, at 3.313, which is marked near the highs of September 14th and October 6th. Although the technical picture clearly shows that the momentum is still to the upside, we would prefer to see a daily close above that barrier first, before examining larger extensions to the upside.
If, eventually, TEF does close above that 3.313 barrier, this may attract more buying interest, as such a move could increase the stock’s chances of drifting towards the 3.383 hurdle, marked by the highest point of September. The price might get halted there initially or correct slightly lower. If the share price is able to stay either above the 3.313 zone, or the 200 EMA on our 4-hour chart, new buyers may jump into action. If so, TEF might travel back to the 3.383 barrier, a break of which could clear the path towards higher areas. We will then target the 3.467 obstacle, or the 3.547 level, marked by the highs of August 27th and 28th.
The RSI and the MACD are both currently pointing higher. In addition to that, the RSI is well above 50 and the MACD sits comfortably above zero and its trigger line. This picture indicates a rising upside speed of the price, suggesting that the stock has a good opportunity to move further north.
Alternatively, if the share price reverses sharply and falls below the 3.138 hurdle, or the 3.100 zone, marked by the high of October 26th and the current low of today respectively, that may spook the buyers from the arena temporarily. TEF may slide to the 2.998 obstacle, a break of which could send the stock to the 2.925 level, marked by the highs of November 3rd and 5th.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
There are risks involved with trading of cash equities. Past performance is not indicative of future results. You should consider whether you can tolerate such losses before trading. Please read the full Risk Disclosure.
Copyright 2020 JFD Group Ltd.