Prosegur Compania de Seguridad SA (BME: PSG) is one of the largest multinational security companies, originating from Spain, with its headquarters in Madrid. The company has a huge presence in Spain, Portugal, Latin America and from 2013 in Australia. PSG entered foreign markets mainly by acquiring similar companies. The company has still some potential to grow, however it remains very vulnerable to the whole coronavirus outbreaks, as it employs around 170000 workers. Most of those workers interact with the general public on a daily basis, due to the nature of the business, which means they are at higher risk of getting infected. That said, if the coronavirus cases stabilise, or go down significantly, this may help other companies, which use Prosegur’s services, to try and get back on track, this way helping PSG to rise again.
The company’s stock also took a major hit in the end of February of this year, together with the rest of the market. Because of the slide, the share price value got cut in half, comparing to the price in the beginning of this year. That said, this week, the PSG seems to be showing willingness to move higher, as it continues to balance above a short-term tentative upside support line drawn from the low of July 31st. However, before examining higher areas, we would prefer to wait for a clear break above some key resistance barriers first.
If the stock gets a boost and climbs above the 2.296 barrier, which marks yesterday’s high, that may open the door to some higher areas, as such a move would confirm a forthcoming higher high. PSG could then move further to test the 2.376 zone, marked by the high of March 31st. The share price might stall there for a bit, however if there are still plenty of new investors at that price, this may lead to a break of that territory, potentially sending the stock further north. That’s when we will aim for the high of March 17th, at 2.463.
Looking at our oscillators on the 1-hour chart, the RSI and the MACD, both seem to be in support of the above discussed scenario. Although the RSI is currently a bit flat, it still remains above 50. The MACD is also slightly on the flat side, however remains well above zero and its trigger line.
Alternatively, if the previously-discussed upside line breaks and the share price falls below the 2.205 hurdle, marked by yesterday’s low, that may spook the buyers from the arena for a bit, as such a move could increase the stock’s chances of moving lower in the near term. This is when we will aim for the 2.094 hurdle, a break of which may clear the way to the 2.028 area, or the 2.010 level, marked by the lows of July 31st and 27th respectively.
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