After rebounding from the 7.75 hurdle in mid-March, the Iberdrola SA stock (BME: IBE) managed to climb back up and today it is floating near the 9-euro mark. From the technical side, we can see that the recent price action has formed a potential ascending triangle, which, according to TA rules, tends to break to the upside. That said, until we see a clear break and a daily close above the 9.22 barrier, we cannot examine higher areas. Let’s not forget that sometimes the breakout happens through the lower side of the pattern, which goes against the rule. This is why we will stay neutral, at least for now.
If IBE eventually breaks and closes a day candle above the 9.22 barrier, which is marked near the highs of March 17th, April 6th and 7th, this could attract even more buyers into the game, this way pushing the price further north. The stock could then test the 9.50 hurdle, marked by the high of March 20th, which may provide some initial resistance and halt further acceleration. That said, if the buyers still find IBE attractive near the 9.50 price tag, this might help push the stock higher, potentially aiming for the 9.80 area, which is the high of March 11th. Above that area sits another possible resistance level, marked by the high of March 10th, which could get tested as well.
Looking at our oscillators, the RSI and the MACD, they seem to be in support of our temporary neutral stance, at least for now. The RSI is moving around 50 and the MACD is balancing fractionally above zero, but slightly below its trigger line. Both indicators are currently flat.
On the downside, if the stock breaks the lower side of the aforementioned ascending triangle and travels below the 8.77 hurdle, which marks the lows of April 8th and 9th, that may clear the path for further declines. We will then examine a possible test of the 8.43 obstacle, a break of which could send the share price to the 8.24 level, marked by the low of March 23rd.
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