After a sharp reversal to the upside on December 26th, the Western Union stock (NYSE: WU) continues to trade above its medium-term upside support taken from the low of that day. But at the same time, the share price remains below it’s the long-term downside resistance line drawn from the high of January 8th, 2018. As long as the price balances between those two lines, we will stay neutral and wait for one of the lines to be violated before getting comfortable with any further directional move.
If the stock travels higher and breaks the above-mentioned long-term downside line, this would also place the share price above its key resistance level at 19.75, marked by the highs of April 29th and May 16th. Such a move might lead WU to the 20.00 barrier, a break of which could open the door the 20.49 zone, which throughout the whole of July 2018 held the price down and did not allow it to close higher. We may see a small throwback from there, but if WU continues to trade above 20.00, this might interest more investors to jump in and drive the stock higher, potentially bypassing the 20.49 area and hitting the 20.79 hurdle, marked by the highest point of August 2018.
Alternatively, a price-drop below the 19.00 support zone could also lead to a break of the aforementioned medium-term upside line. Such a move might spook new investors from entering the action and this may increase WU’s chances to drift further south. This is when we will aim for the 18.58 obstacle, a break of which could send the price further down towards the 17.92 level, marked by the lows of March 18th and 21st.
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