The Hermès International S.A. stock (EPA: RMS) took a deep dive in the end of February, together with the rest of the market. However, last week, we saw an increase in the buying interest, which helped the share price close the week well in the positive territory. As we already know from history, sometimes during turbulent times, luxury brands tend to avoid major declines, as rich buyers are able to find value for money in the discounted luxury goods. From the technical side, the stock managed to break above its short-term tentative downside line last week and today RMS is still balancing above it. However, in order to get comfortable with higher areas, we would first like to see a break above the high of last week, at 620.80.
If the share price rises above that 620.80 barrier, this will confirm a forthcoming higher high and more buyers may see an opportunity to jump into the action. That’s when we will aim for the 640.00 hurdle, a break of which could set the stage for a move to the current highest point of March, at 659.60.
Looking at our oscillators, the RSI and the MACD, both seem to be somewhat in support of the above-discussed scenario. The RSI is slightly pointing higher, while balancing above 50. The MACD had recently moved from its lows and remains above the trigger line. Although the indicator is just fractionally below zero, it continues to point higher.
Alternatively, if the stock moves back below the aforementioned downside line and falls below the 568.00 obstacle, marked by the current low of today, this could spook new investors. RMS might then drift to the 555.20 obstacle, a break of which could clear the path to the 535.20 zone, marked by an intraday swing high of March 18th. The stock could stall around there, or even correct back up a bit. That said, if the share price finds it difficult to get back above the downside line, this could lead to another slide. If this time the 535.20 fails to provide decent support, its break could send the share price to the 513.80 level, marked by the current lowest point of March.
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