Like some of the other big companies, AXA Insurance and its stock (EPA: CS) got hit by the market sell-off between the end of September up until mid-December last year. But since then, CS had recovered most of the losses made during that decline period. Having said all that, we have seen now throughout the whole of March is that the buying momentum had eased off a bit and the stock failed to create a higher high. Also, it could be too early to say of course, but CS might be forming a head-and-shoulders pattern, which may lead to a decline soon. For now, we will remain neutral and wait for a confirmation break of one of our key levels first, before examining potential declines.
If we see the so-called “neckline” getting broken and the price falling below the 21.87 hurdle, this is where investors could totally abandon the stock, at least for a short-while. CS might continue sliding towards its next obstacle, at 21.49, marked by the low of February 26th, which also coincides with the 200 EMA on the 4-hour chart. If all that is not enough to withhold the price from moving lower, a further push in the southern direction might bring the price to the 21.10 support area, which on February 20th was just seen as an intraday swing low, but on December 4th it played an important role as a support zone.
Looking at our oscillators, both indicators are losing speed. The RSI is fractionally below 50 and slightly points to the downside. The MACD had recently dropped below zero, but currently sits slightly above its trigger line. Most importantly, is that both indicators are showing negative divergence with the stock’s price action. This suggests that near-term declines could be possible.
Alternatively, in order to examine the upside again, we would like to see CS breaking above the March high, at 23.00 barrier first. This way, the stock would confirm a forthcoming higher high and could also attract investor interest again. The share price could then accelerate to its next potential target at 23.37, which if broken could open the door for a further rise to the 23.90 level, marked by the highest point of October 2018.
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