BASF Stock Is Testing The Upside Line

by Darius Anucauskas
11:36, 2020/05/04

Looking at the technical picture of the BASF stock (ETR: BAS) on the 4-hour chart, we can see that the price is being held from falling lower by a short-term upside support line taken from the low of March 17^th. Although the stock is still running above that upside line, it is now trading below all of its EMAs, which could be a worrying sign for the buyers. For now, we will take a neutral stance and wait for a violation of one of our hurdles, before examining the next short-term directional move.

If the aforementioned upside line continues to hold the share price from falling, this may help bring the stock up again. However, to get comfortable with higher areas, we would like to see a strong push through the 49.58 barrier, which is the highest point of April. In addition to that, a break above the 200 EMA could strengthen the possibility to see a further acceleration. This is when we will target the 51.47 obstacle, a break of which may set the stage for a move to the 55.22 level, marked by the low of February 27^th and the high of March 3^rd.

The RSI and the MACD started pointing to the downside, which supports the idea of staying a bit cautious for now, given that the stock is still slightly above the upside line. The RSI is slightly below 50 and the MACD is below its trigger line, despite still being above zero.

If, eventually, the previously-discussed upside line breaks and BAS falls below the 43.08 hurdle, which is the low of April 21^st, this would confirm a forthcoming lower low and increase the stock’s chances of drifting further south. That’s when the share price could go down to the 40.52 zone, which if fails to attract new buyers and breaks, might clear the way for BAS to slide to the 38.37 level, marked by the low of March 23^rd.

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