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by Darius Anucauskas

Anglo American Stock Is on Shaky Grounds

From the beginning of December, the Anglo-American stock (LON: AAL) had a great run, where it kept trading above its medium-term tentative upside support line drawn from the low of December 6th. But on Friday, the upside line got violated and the share price slid closer to the psychological 2000 area. AAL is still trading above that zone, but given that upside trendline has been broken now, the chances of seeing a further move lower have increased, hence why will take a somewhat bearish stand for now.

If the stock does not attract any investor interest at the psychological 2000 level, a break below it could send AAL a bit lower, to test the 1970 support area, which is marked by the low of March 27th. At some point, the share price could rebound back up, but if it continues to trade below the aforementioned upside support line, we will class any move higher as a temporary correction before another leg of selling. This time, if the stock travels further south and the 1970 hurdle fails to hold it, a break below it might open the door to the 1916 obstacle, or even the 1897 level, marked by the lows of March 25th and February 12th respectively.

On the other hand, a break back above the previously-discussed upside support line and a strong push above the 2076 barrier, could increase the stock’s chances to move up again in the near-term. This is when we will examine the possibility for AAL to move towards the 2127 obstacle again, which marks the intraday swing low of April 17th. If the buying doesn’t ease off there, a further push higher could bring the share price to the 2189 mark, which is the high of April 23rd.  

AngloAmerican daily


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