After December’s reversal to the upside, the Xerox Corp stock (NYSE: XRX) had risen substantially and managed to almost double its value in mid-April. But from there onwards, XRX started moving lower, eventually hitting its key support at 30.90, from which it bounced a couple of times already. That area also coincides with the 200 EMA on the 4-hour chart. Given that the share price started printing lower highs, but recently failed to make a lower low, we will take a cautiously bearish stance for now and wait for a confirmation break below that support area, before getting comfortable with the downside.
A price-drop below the 30.90 hurdle, marked near the lows of March 25th, May 13th and May 23rd, could spook investors from joining in. This may result in the stock sliding towards the 29.77 zone, which held the price from falling on February 14th and March 8th. If XRX gets held there once again, it may even bounce back up a bit. But if the price remains below the previously mentioned 30.90 barrier, this may lead to another sell-off. The stock could then bypass the 29.77 hurdle and end up hitting the 28.69 level, which is marked by the lows of February 7th and 8th.
Our oscillators, the RSI and the MACD, are giving us somewhat mixed signals, at the moment. The RSI, although below 50, is pointing to the upside. The MACD is just slightly below zero and fractionally below its trigger line. That is why we will just continue observing these indicators for now, until we see a clearer picture.
Alternatively, if XRX pushes higher and breaks above the 32.97 barrier, marked by the high of May 21st, this may attract more buyers into the game. The share price might accelerate further up, potentially breaking above the 33.71 obstacle and testing the 34.45 zone, which is the high of April 23rd. We may then get a small throwback from the stock, but if it continues to trade above the 32.97 area, this could result in more buyers jumping in and lifting the price all the way to its April high, at 35.17.
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