After hitting its all-time high, at 104.44 on April 26th, the Yum! Brands Inc. stock (NYSE: YUM) reversed south and travelled below its medium-term tentative upside support line taken from the low of February 7th. The share price is now gradually moving lower, potentially aiming for the long-term upside line drawn from the low of July 25th, 2018. That’s why we will stay somewhat bearish for a while. That said, before the stock could slide further towards that line, YUM would have to overcome some of its key support levels.
A drop below the 98.98 support area, which held the price from falling between April 8th and 11th, could open the door to some lower levels. One of the first potential zones to be hit might be the 97.70 level, marked by the low of March 28th. If there are no takers of the stock even at that price, the depreciation may continue. This is when we will aim for the 95.50 hurdle, which marks the highs of February 25th and March 1st, as well as the low of March 8th. Slightly below that hurdle sits the previously mentioned long-term upside line, which may provide additional support for the stock, in case it overshoots the 95.50 level.
Our oscillators, the RSI and the MACD, are showing downside momentum. The RSI is below 50 but remains a bit on the flat side. Unlike the RSI, the MACD is showing a bit more confidence for the short-term downside scenario. The indicator is pointing lower, it is below its trigger line near zero.
On the other hand, if investors continue to see value in YUM, a push back above the 101.81 barrier, marked by the high of May 10th, could invite more buyers in the game. Such actions could drive the stock north, potentially testing the 103.46 obstacle, a break of which may clear the path towards the all-time high level, at 104.44. As we mentioned above, this mark was achieved on April 26th. A push above that level would signal a forthcoming higher high and create a new all-time high.
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