After finding good support near the 4.19 level, which is not far from the all-time low, at 4.13, the BBVA stock (LON: BVA) reversed to the upside and continues to move in northern direction. With the help of this move, the share price has risen above its 200 EMA on the 4-hour chart and broke above its medium-term tentative downside resistance line taken from the high of April 17th. BVA is currently balancing slightly below its key resistance barrier, at 4.77, which we will monitor carefully. Even though the stock broke its downside line, which could mean a change in the medium-term trend, we need a clear break above the 4.77 zone first, before we could examine higher areas. This is why for now, we will stay cautiously-bullish.
As mentioned above, a break of the 4.77 barrier may open the door for a further price acceleration, which could lead the stock to the 4.91 hurdle, which is an intraday swing high of July 25th. If that area is just seen as a temporary obstacle on the way higher, its break may clear the path to the 5.01 zone, which is the high of July 16th. This is where the initial hold-up might occur. BVA might correct back down a bit, but if it continues to trade above the 4.91 area, new buyers could see it as a good opportunity to step in and drive the price higher again. Such a move might bypass the 5.01 hurdle and send the stock to the 5.13 level, marked by the highest point of July.
Alternatively, if the price drops, not only below the previously-discussed downside line, but also below the 4.54 hurdle, which is the low of September 10th, this may force some investors to liquidate on their current positions and BVA could drift lower. The stock may then travel to the 4.42 obstacle, a break of which could open the door for a possible test of the 4.36 area, marked by the high of August 30th and September 4th. Slightly lower runs a short-term tentative upside line, drawn from the low of August 20th, which may provide additional support.
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