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by Darius Anucauskas

Could It Just Be A Small Correction Before Another Leg of Buying?

After hitting its all-time high at the 457.00 mark, Christian Dior SA stock (EPA: CDI) corrected back down a bit. The share price continues to trade above its short-term tentative upside support line drawn from the low of May 6th. But given that the price had distanced itself from that line, CDI is now trying to make its way back to it, which if not broken, could prove to be a good bouncing ground again. If that happens, more investors could join in and drive CDI up, hence why, from the very short-term perspective, we will aim a bit lower, but in the near-term we are still somewhat more positive.

A price-drop below the 432.40 hurdle, marked by the low of June 6th, would also place the stock below its 100 EMA on the 4-hour chart, which might increase the chances for a further correction down. We may then see a test of the aforementioned upside line, which if holds, could act as a good support area and allow CDI to bounce back up. This would come in line with the above-discussed scenario and we could then aim for the 432.40 obstacle (this time from underneath), a break of which could send the share price to the 444.40 barrier, marked by the low of June 12th.

Judging from our oscillators, the RSI and the MACD, both are somewhat in support of the above-mentioned initial correction lower. The RSI looks a bit flat but sits below 50. The MACD had topped recently and is now moving lower, by running below its trigger line. That said, the MACD still remains in the positive territory.

Now, in case the previously-discussed tentative upside line breaks and the price falls below the 418.80 hurdle, marked by the low of June 4th, this could open the door for a further slide, as it would also place the stock below its 200 EMA on 4-hour chart. We will then aim for the 415.20 zone, a break of which could send CDI to the 409.00 level, which is the lowest point of May.

Dior 4-hour

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