Volkswagen AG Preference Shares (ETR: VOW3) continue to trade below the medium-term downside resistance line, taken from the high of May 22nd. But from the short-term perspective, since the first days of January, the stock has been on an up-move, printing higher lows, above a tentative upside line. VOW3 is now stuck between those two lines and it seems to be coiling up. We will continue monitoring the share price carefully, as we wait for it to break through one of the above-mentioned lines, before we make any further judgement.
If the stock eventually breaks through the aforementioned downside resistance line and makes a daily close above the 152.35 level, this may attract more investors into the game, as the possibility for VOW3 to move higher could increase. This is when we will aim for the 156.72 obstacle, a break of which may lift the price to the 159.35 barrier, marked by the high of November 2nd.
Our oscillators are in line with the idea of holding back until we see a clear move from the stock. The RSI remains slightly above 50, but is on the flat side, for now. The MACD is above zero, which is a positive sign, but also points sideways, and is just fractionally above the trigger line.
Alternatively, a break of the previously-mentioned short-term upside support line and a rate-drop below the 145.65 hurdle, could spook investors, at least for a while, as the stock may continue sliding further. The next potential support zone could be seen around the 141.30 obstacle, but if it gets violated, the share price could fall to 138.30 level, marked by the low of January 8th.
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