From January 2018, the Vodafone Group plc stock (LON: VOD) has been drifting lower. In the end of May, after a strong sell-off, the share price found good support just slightly above the 122.00 mark and then moved higher. The stock managed to recover some of its losses, but as we can see now, VOD started moving sideways within a wide rising channel formation. Looking at the price action from the near-term perspective, we believe that the stock could continue grinding up. But before it could move higher again, there is a descent chance we could see a larger correction to the downside in the short run, hence why we will stay somewhat bearish for now.
A drop below the 128.90 hurdle, marked by the highs of June 21st and July 2nd, could open the door to a further slide. Such a move might push the stock towards the 126.30 obstacle, which held the price from falling on July 1st. We may see VOD stalling around there again, but if there are no takers of the stock even at that price, it may continue drifting south, where the next support zone could be around the 124.60 level, marked by the intraday swing high of June 25th. Slightly below is the lower side of the aforementioned rising channel, which could also provide additional support for the price.
Looking at our oscillators, the RSI and the MACD, both seem to be in support of the short downside scenario. The RSI, even though somewhat flat right now, is below 50, which may be seen as a bearish indication. The MACD is also not providing any reassurance for the buyers, as it is below zero and its trigger line. In addition to that, the indicator is pointing to the downside.
Alternatively, if the stock reverses and pushes above the 131.30 barrier, marked by the lows of July 10th and 12th, this could spark some interest among potential new buyers, who could lift the share price to the 133.60 mark, which is the high of July 11th. If the buying doesn’t stop there, VOD could easily move further north, aiming for the highest point of July (so far), at 135.20. Just a few points higher is the upper side of the rising channel, which could help hold the price down for a while.
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