Today, after the European opening bell, the Capgemini SE stock (EPA: CAP) opened with a large gap to the downside and continued to drift south. We can see that the main price action is currently maintained between to lines: a short-term downside resistance one drawn from the high of January 24th, and a medium-term tentative upside one taken from the low of October 25th. Today, the price came close to testing one of its key support areas near the 112.25 level, marked by the current lowest point of February. For now, we will take a cautiously-bearish approach and aim a bit lower, especially if CAP slides below the 112.25 hurdle.
As mentioned above, a drop below the 112.25 zone may increase the stock’s chances of drifting further south, as the break would confirm a forthcoming lower low. In addition to this, if CAP also moves below the 200 EMA on the 4-hour chart, this may lead to a test of the 111.05 zone, which might provide some initial support that could slow down the fall. That said, if there are still no new buyers at that price, this could result in another drop, possibly pushing CAP towards the aforementioned upside line, which may stop the freefall.
The RSI and the MACD on our 4-hour chart are currently pointing in the southern direction, which somewhat supports the above-discussed scenario. Also, the RSI is below 50 and the MACD is below zero, while running below its trigger line.
In order to get slightly comfortable with higher areas, we will wait for a break of the previously-discussed downside resistance line and a push above the 116.55 barrier, marked by an intraday swing low of yesterday. That’s when more buyers could join in and lift the stock either to the 117.55 hurdle, or to the 118.35 zone, which are the highs of February 12th and 6th respectively. If the buying doesn’t stop there, another uprise could send the price to the 120.85 level, marked by the highest point of January.
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