Looking at the technical picture of the Zardoya Otis SA stock (BME: ZOT), we can see that, overall, it is in a large downtrend, trading below a medium-term tentative downside resistance line drawn from the high of February 14th. But after hitting its all-time low on July 31st, at 5.50, the stock entered into consolidation, trading roughly between the 5.50 and 5.70 levels. All that was up until today, when the share price broke above that range and is now showing willingness to continue with its journey north. From the near-term perspective, we will continue aiming cautiously to the upside, however, we will not forget that overall, this possible move up could be considered as a corrective one, as long as the price stays below the aforementioned downside line.
Given that today ZOT broke the upper side of the above-discussed range, at 5.70, the share price may rise to the 5.82 hurdle, a break of which might clear the path to the 5.92 zone, marked near the highs of July 21st and 23rd. The stock could stall there for a bit or correct a bit to the downside. That said, if it continues to float above the 5.70 zone, new buyers might step in and lift ZOT above the 5.92 barrier, where the next target may be between the 6.05 and 6.08 levels, marked by the highs of July of 16th and 13th. Slightly above those levels runs the aforementioned downside line, which could provide additional resistance.
The RSI and the MACD on our 4-hour chart started pointing slightly to the upside. In addition to that, the RSI has moved above 50, suggesting a rising upside price momentum, which supports the above-discussed scenario. However, despite being above its trigger line, the MACD remains fractionally below zero, keeping us on the slightly cautious side.
In order to examine the downside, we would first have to wait for a drop below the 5.50 hurdle, which is the lower side of the previously-mentioned range. This way, the stock would confirm a forthcoming lower low and enter the uncharted territory. One of the levels we would consider as the next target might be the psychological 5-euro mark.
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