Today, the Michelin stock (EPA: ML) is pushing strongly to the downside, falling below the January low, at 103.55. From November 7th, 2019, the share price is trading below a medium-term tentative downside resistance line. For now, all the indications are leaning towards a further decline, but in order to get comfortable with that idea, we would like to see a daily close below January’s low first. This is why we will stay cautiously bearish, at least for now.
As mentioned above, if we do get a daily close below the 103.55 hurdle, which is January’s low, then we may consider a further decline, at least in the near term. That’s when the stock may slide to the 101.05 hurdle, which is the low of October 24th. Even if the price bounces off from that hurdle, but struggles to move back above the 103.55 barrier, this might keep new investors away from entering the game. Such action could lead to another slide, which could bypass the 101.05 obstacle and aim for the 98.10 level, marked by an inside swing high of October 7th.
The RSI and the MACD are currently leaning more towards the downside. The RSI is below 50 and points lower. The MACD has moved fractionally below the trigger line, while still running below zero.
Alternatively, more buyers could join in if the price breaks the aforementioned downside line and pushes above the 109.12 area, which is the current highest point of February. That way we will aim for the 112.75 and the 113.65 levels, marked by the highs of January 21st and December 13th respectively. Initially, ML might get a hold-up around there, but if the buying interest is still elevated, a further drift north could bring the share price to the 116.30 zone, marked by the high of November 12th.
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