Overall, we can see that the Adidas AG (ETR: ADS) is still within a larger uptrend, trading above a medium-term upside support line taken from the low of December 27th. But from a near-term perspective, after reaching an all-time high on August 1st, the price reversed back down and broke below a slightly steeper upside line, which had been in play from March 13th. Such a move adds a bit of negativity to the short-term outlook, which means that we may see the stock sliding further in short run, hence why we will stay bearish for now.
Today, the stock managed to reach one of its support areas, at 270.85, that was able to stop the move lower. That said, if ADS eventually ignores that area and continues with the path down, this may lead the stock to the 262.10 zone, marked by the low of June 25th. If that zone is just seen as a temporary obstacle on the stock’s way down, a break of it could send the share price towards the 251.85 mark, which is the low of May 31st. ADS might stall around there, or even corrects back up a bit and we might get a test of the 262.10 hurdle again, but this time from underneath. If there are still not enough new buyers at that point, the stock could reverse back down, fall below the 251.85 zone and end up moving towards the support area between the 244.25 and 241.00 levels, marked by the low May 14th and by the low of May 3rd. Slightly lower runs the aforementioned medium-term upside line, which could also provide some support for the price.
Our oscillators are now somewhat in support of the above-discussed idea. The RSI is below 50 and continues to point lower. The MACD, even though still in the positive territory, had fallen below its trigger line and points to the downside as well. Both indicators suggest that there might be some more downside in the upcoming days.
Alternatively, a strong reversal and a push back above the today-broken steeper upside line could invite more buyers into the game. This may give a bit of hope to investors that the stock has a chance to move higher. We will then examine the 290.65 resistance area, which if broken may lead the price to the all-time high again, at 296.70, reached on August 1st. If new investors are still seeing good value in the stock even at that price, a break of the 296.70 level would confirm a new all-time high and lead the stock into uncharted territory.
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