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by Darius Anucauskas

Can Henkel “Clean” the 90.38 Resistance?

Since its reversal to the upside in the end of January, Henkel AG & Co KGaA Preference Shares (ETR: HEN3) continued to drift higher in an orderly fashion, trading above a short-term upside support line taken from the low of January 24th. Most recently though, from March 1st, the share price started moving sideways between the 88.54 and 90.38 levels, but it is still balancing above that upside line. For now, we remain cautiously-bullish but wait for a confirmation break first, before getting comfortable with the upside.

If, eventually, HEN3 breaks above the 90.38 barrier, this could open the door for the stock to travel further north towards the 92.24 hurdle, marked by the low of January 17th. If the buying doesn’t stop there, we may see a further rise to the next potential area of resistance at 93.68, which marks the lows of December 27th and January 3rd. If the stock breaks the aforementioned upside support line, but remains above the 88.54 level, the near-term outlook will become more neutral. Still, not all will be lost for the buyers, because as long as the price stays above the 88.54 level, there could be a good chance that investors might get interested then, which could lift the stock.

Our oscillators are somewhat in support of a potential move higher. The RSI is currently more on the flat side but remains above 50. The MACD is somewhat flat as well but started showing willingness to push higher by moving fractionally above its trigger line.

On the other hand, if the price slides below the 88.54 hurdle, this might spook investors, or at least place their buying-interest on hold. We will then examine the possibility of seeing a further move down towards the 87.08 obstacle, a break of which could drag the stock even lower. This is when the 85.80 support zone could come into play. This area was last time tested on February 14th.

Henkel 4hour


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