From the beginning of this year, the Visa Inc. stock (NYSE: V) had already gained roughly around 19%. The share price also managed to reach an all-time high on May 1st, at around 165.70, from which the stock reversed back down and travelled lower. Such a move led to a break of its medium-term upside support line taken from the lowest point of December. This now raises concerns over the stock’s upside potential, at least in the short run. But before we get comfortable with targeting slightly lower levels, we need to see one of our key support zones getting broken first, hence why we will remain cautiously bearish for now.
A price-drop below the area between 158.00 and 158.51 could send V towards the 156.30 hurdle, marked by the lowest point of April. We may see the price stalling around there for a bit, but if there are no takers of that stock at that level, another break could open the door for some lower support areas. One could be the 151.60 barrier, which acted as a good resistance level on October 1st and also as a strong support on March 25th. This is also where V could meet with its 200 EMA on the 4-hour chart.
Our oscillators are pretty much in support of the above-discussed scenario. The RSI, even though it is currently pointing higher, still, it reversed from the highs it saw in the last days of April and travelled below 50. The MACD also moved lower after topping at the end of April. Although the indicator is still in positive territory, it is now sitting below the trigger line and points lower.
Alternatively, if V suddenly reverses and makes a strong comeback above the 162.63 barrier, this might start making investors interested again. But in order to start examining higher levels, we would prefer to wait for a confirmation break and a close above its all-time high area, at 165.70. This way the stock would enter uncharted territory, where we it could target obstacles like 170.00, or 175.00.
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