This week, after hitting the area slightly above the 9-euro mark, at 9.06, the stock of the French utility company Electricite de France SA (EPA: EDF) started drifting lower. Although there is a possibility to see a bit more downside in the near term, still, we will class this move as a temporary correction, especially if the share remains above the highest point of April, at 8.16, or its short-term upside support line. That upside line is drawn from the low of April 28th. Overall, we will stay somewhat positive, at least for now.
As mentioned above, a small move lower could bring the price closer to the previously-discussed 8.16 hurdle, which if provides decent support for EDF, could attract the buyers back into the game. The share price may then rise further towards the 8.71 obstacle, a break of which could set the stage for a rise to the 9.06 level, marked by the current highest point of this week. If new investors still see value in the stock even at that price, this may help push EDF to its next possible resistance obstacle, at 9.60, marked by an intraday swing high of March 13th.
Looking at our oscillators on the 4-hour chart, the RSI and the MACD, both seem to be supporting the idea of a small setback first. The RSI is just fractionally below 50, but points just slightly higher. The MACD is running below its trigger line and seems to be moving a bit lower. However, the indicator still remains above zero.
In order to abandon the near-term upside scenario, a break of the aforementioned upside line would be needed, together with a price-drop below the 7.75 hurdle. That hurdle marks the low of May 29th. If such a move occurs, the stock might continue sliding, potentially targeting the 7.20 obstacle, a break of which may set the stage for a fall to the 6.81 level, marked by the lowest point of May.
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