Overall, the Michelin stock (EPA: ML) is still trading above its medium-term tentative upside support line drawn from the low of August 29th. But from the shorter-term perspective, after peaking near the 119.45 level in the beginning of November, the share price keeps on sliding lower, which led to a break of its short-term upside line taken from the low October 9th. This move had established a new short-term line, but this time a downside one, taken from the high of November 7th. Given the technical picture, which is seen right now on our daily chart, there might be a good chance to see some further declines. But let’s not forget that on a broader scale, this move lower could still be considered as part of a larger correction.
Today, ML has already shifted below its key support zone, at 110.20, which is the low of last week. This move is now opening the path for a possible slide to the 106.45 hurdle, marked by the low of October 31st. Initially, the stock might get a hold-up around there, or even rebound back up. But if the price fails break above the aforementioned downside line, this may lead to another slide, possibly bringing ML to the 104.90 area, or even to the previously-discussed medium-term upside line, which could provide additional support.
Our oscillators, the RSI and the MACD, are in support of the above-discussed idea. The RSI is below 50 and points lower. The MACD, although still above zero, is now moving lower and sits below its trigger line.
Alternatively, if the aforementioned downside line breaks and the price climbs above the 113.00 barrier, marked by yesterday’s high, this could attract more buyers into the game, which may help push ML higher. We will then aim for the 116.30 obstacle, a break of which could set the stage for a further move towards the 119.45 level, which is currently the highest point of this year.
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