Looking at the technical picture of the BASF stock (ETR: BAS) on the 4-hour chart, we can see that the price is being held from falling lower by a short-term upside support line taken from the low of March 17th. Although the stock is still running above that upside line, it is now trading below all of its EMAs, which could be a worrying sign for the buyers. For now, we will take a neutral stance and wait for a violation of one of our hurdles, before examining the next short-term directional move.
If the aforementioned upside line continues to hold the share price from falling, this may help bring the stock up again. However, to get comfortable with higher areas, we would like to see a strong push through the 49.58 barrier, which is the highest point of April. In addition to that, a break above the 200 EMA could strengthen the possibility to see a further acceleration. This is when we will target the 51.47 obstacle, a break of which may set the stage for a move to the 55.22 level, marked by the low of February 27th and the high of March 3rd.
The RSI and the MACD started pointing to the downside, which supports the idea of staying a bit cautious for now, given that the stock is still slightly above the upside line. The RSI is slightly below 50 and the MACD is below its trigger line, despite still being above zero.
If, eventually, the previously-discussed upside line breaks and BAS falls below the 43.08 hurdle, which is the low of April 21st, this would confirm a forthcoming lower low and increase the stock’s chances of drifting further south. That’s when the share price could go down to the 40.52 zone, which if fails to attract new buyers and breaks, might clear the way for BAS to slide to the 38.37 level, marked by the low of March 23rd.
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
There are risks involved with trading of cash equities. Past performance is not indicative of future results. You should consider whether you can tolerate such losses before trading. Please read the full Risk Disclosure.
Copyright 2020 JFD Group Ltd.