After hitting its all-time high at 123.50 on April 29th, the Airbus SE stock (EPA: AIR) reversed south and is now forming lower lows and lower highs. Today, the share price managed to fall below one of its key support areas and it looks like the slide might continue for a while more. The stock is also trading now below a short-term tentative downside line resistance line drawn from the high of May 17th, hence why will take a bearish approach for now.
As we mentioned above, AIR broke below one of its key support areas, at 114.74, which marks the lows of March 27th, May 13th and 23rd. Such a move has opened the door for the stock to aim towards a new lower low. Initially, we will target the 112.64 hurdle, a break of which could send the price further down, to test the 110.18 support area. That area held AIR from moving lower on March 8th, which could do the same trick again and keep the stock afloat for a bit. Also, the area might prove itself as a good temporary bouncing ground, from which the price may retrace to the upside. But if after retracing higher, AIR struggles to overcome the aforementioned downside line, this might result in another slide. If this time the 110.18 obstacle is not able to withhold the negative pressure, a break of it could lead the price to the 107.64 zone, marked by the low of February 14th.
If we take a quick look at our oscillators, the RSI and the MACD, we can see that both are in support of the above-discussed scenario. The RSI is below 50 and points to the downside. The MACD is below zero and its trigger line, and also points to the downside.
The alternative scenario here would be if AIR moves higher, breaks and closes a daily candle above the previously mentioned downside line. But for a better confirmation of the upside, ideally, we would like to see a strong push above the 117.78 barrier, marked by the high of May 27th. This way we could target the 119.70 hurdle, which marks the high of May 21st. If the buying activity is still strong, the 119.70 hurdle could just be seen as a temporary obstacle on the stock’s path north, where the next potential resistance levels could be at 122.78 and 123.50, marked by the highs of May 17th and April 29th.
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