The stock of the French advertisement giant JC Decaux (EPA: DEC) had been on a gradual decline from the beginning of this year, trading below a short-term downside resistance line drawn from the highest point of February. But after finding good support near the 15.00-euro mark, the stock moved back up again and today we saw a slight violation of that downside line. However, given that the price retraced a bit and now rests on that line, we will wait until we see a clear break of one of our levels, before considering a further directional move. We will take a neutral stance for now.
If, eventually, the stock makes a stronger move higher and breaks above yesterday’s high, at 17.34, this could make DEC a bit more attractive to potential new buyers. The share price may then rise to the 19.23 hurdle, which is the high of March 20th. Initially, the stock might get a hold-up there. That said, if the buyers are still interested in DEC even at that price, it may travel further north. This is when we will aim for the 20.62 barrier, marked by the highs of March 6th and 10th.
Our oscillators on the 4-hour chart, the RSI and the MACD, are suggesting there could be a bit more upside in the near future. The RSI and the MACD are both pointing slightly higher. The RSI is above 50 and the MACD just crossed over the zero line. However, as mentioned above, we would like to see a break above 17.34 first, before getting comfortable with higher areas.
On the other hand, if the price slides back below the aforementioned downside line and falls below the 16.42 area, this would also place the stock below the 21 EMA on the 4-hour chart. DEC could then drift to its key support level, at 15.00 which may stall the price initially. That said, if there are no new buyers of the stock at that level, this could result in another drop, possibly targeting the 13.60 zone. That zone marks the lowest point of October 2009.
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