The French transnational waste management company Veolia Environnement SA (EPA: VIE) has been struggling lately to find interest among new investors. The company’s stock plunged together with the rest of the market at the end of February. During the continued fall in March, the share price was cut to almost half, sliding to the 16-euro mark. From there, VIE managed to show a modest recovery, however that was still not enough to even bring the stock back into positive territory for the year, where the opening price sits at around 23.87. From the beginning of June, the share price is declining again, but is currently finding some decent support near the 19.73 area.
From the technical side, the stock seems to be forming a descending triangle, which according to the TA rules, tends to break to the downside. That said, before the actual violation of the lower side of that formation happens, we will continue observing the price action, hence why our neutral stance for now.
If VIE does makes its way lower and closes a trading day below the lower side of the of the aforementioned triangle, at 19.73, that may open the door for further declines, as some new investors might get spooked from entering. The share price might drift to the 19.09 hurdle, marked by the high of May 19th and the low of May 27th, a break of which could set the stage for a slide towards the 18.51 level. That level marks the high of May 25th and the low of May 26th.
The RSI and the MACD are currently somewhat flat on our 4-hour chart, which could support the short-term idea of staying neutral for now. That said, the RSI remains below 50 and the MACD is just fractionally below zero and its trigger line. This is indicating that there is negative momentum, which may come inline with the descending triangle theory, potentially leading to some lower areas later on.
However, if the stock somehow picks up a bit of buying interest, enough to break above the upper side of the aforementioned triangle and to push above the 21.03 barrier, marked by the high of June 23rd, that may attract more new investors into the game. VIE may then travel to the 21.29 obstacle, a break of which could clear the way to the 22.12 hurdle, marked by the current highest point of June. If the buying doesn’t stop there, a break of that hurdle would confirm a forthcoming higher high, where the next possible resistance level could be at 22.50, which is the low of March 11th.
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