After its reversal to the upside in the end of July of 2019, the Enagas SA stock (BME: ENG) started slowly grinding higher, while trading above a medium-term upside support line taken from the low of September 10th. Last week, the share price found some good resistance near the 24.73 barrier and corrected back down a bit. The stock may continue correcting lower, but if the above-discussed upside line remains intact, we will stay positive, at least in the near term.
As mentioned above, there is a chance to see a small move down towards the 23.42 hurdle, which is the high of December 27th. Slightly below it runs the aforementioned upside line, which could provide decent support. If so, this might interest a few more buyers to jump in, which may help ENG to shift back to the current high of this year, at 24.73. If that barrier fails to withstand the bull pressure and breaks, this would confirm a forthcoming higher high and more buyers might join the action. The next good resistance target may be seen near the 25.45 level, marked by the high of June 7th, 2019.
Our oscillators, the RSI and the MACD, are somewhat in support of the idea of seeing a small correction. The RSI recently moved fractionally to the downside and points lower, while still sitting above 50. The MACD remains above zero, but started showing signs of topping.
Alternatively, if the stock slides below the previously-mentioned upside line and falls below the 23.11 hurdle, which is the high of January 10th, this could spook potential new buyers from entering. Such a move might also force a few existing investors to liquidate some of their positions. All this might cause ENG to drift to the 22.33 obstacle, a break of which could set the stage for a move to the lowest point of December, at 21.75.
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