After delivering a better-than-expected earnings result on Monday, Tyson Foods Inc stock (NYSE: TSN) pushed strongly higher, overcoming some of its key resistance areas. The U.S. meat processing giant reported earnings of USD 2.70 per share, whereas the initial forecast was only for USD 1.60. Company’s net sales have grown 24.5% year-over-year, boosted by the ease of the covid-related restrictions. The stock jumped more than 8%, breaking above a short-term tentative downside resistance line taken from the high of June 2nd. TSN is now trading above all of its EMAs on our daily chart and if it continues to do so, we will remain positive, at least with the near-term outlook.
If the stock tests the 77.59 barrier, marked by the high of June 15th, but fails to push through it straight away, we might see a small corrective move back down. However, as mentioned previously, if TSN is able to stay somewhere above all of its EMAs, this may help keep new buyers interested. If so, the share price might drift back to the 77.59 hurdle, a break of which could set the stage for a push to the 79.22 obstacle, or to the 80.98 zone, marked by the highest point of June. Slightly above it sits another potential resistance target, at 81.78, which is the highest point of May.
The RSI and the MACD are both pointing higher. The MACD is still slightly below zero but is now well above its trigger line. The RSI looks a bit more promising, as it is well above 50, showing positive price momentum. This seems to support the scenario for the upside, at least in the near-term.
Alternatively, if the stock falls below the 69.89 hurdle, which is the lowest point of July, this will confirm a forthcoming lower low, potentially opening the door for further declines. TSN could travel to the 67.34 obstacle, a break of which might clear the way to the 63.22 level, marked by the low of February 11th. Slightly below it is another potential support level, at 62.60, which marks the lowest point of February.
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