Unilever Stock Is Stuck Between The Trendlines

by Darius Anucauskas
12:08, 2021/06/07

In the beginning of February of this year, the stock of the Unilever Plc (AMS: UNA), which is traded on the Euronext Amsterdam stock exchange, had declined heavily, eventually finding support near the 43-euro mark. From there onwards the stock got picked up by new buyers, resulting in a rise of the share price. UNA continues to drift higher, while trading above a medium-term upside support line drawn from the low of February 26^th. So far, the stock was able to recover its February’s losses and the price is currently stuck not far from the January highs. From around mid-May, UNA is forming lower highs, while trading below a short-term tentative downside line taken from the high of May 18^th. Given that the price is currently stuck between the two above-mentioned trendlines, we will take a neutral approach and wait for a violation of one of the lines, before examining the next directional move.

If the stock moves higher, breaks the aforementioned downside line and climbs above May’s high, at 50.32, this will confirm a forthcoming higher high, potentially setting the stage for further advances, as more new buyers might join in. UNA could then get lifted to the 51.24 obstacle, a break of which may lead to the 51.94 level. That level marks the high of November 26^th.

The RSI and the MACD are somewhat flat at the time of writing. Nevertheless, the RSI remains above 50 and the MACD is well above zero, but only fractionally below its trigger line. Although the momentum seems to be positive, it lacks directional strength, which supports the idea of waiting for a break of the downside line first, mentioned above.

Alternatively, if the previously discussed upside line breaks and the share price falls below the 49.16 hurdle, marked by the low of June 3^rd, that could spook new buyers from entering for a while. UNA may slide to the low of May 31^st, at 48.70, a break of which might clear the way towards the 47.90 zone, marked by the low of April 29^th. If new buyers are still nowhere to be found, the fall could continue, potentially aiming for the 47.20 area, marked by the inside swing high of April 27^th.

Disclaimer:

The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.

There are risks involved with trading of cash equities. Past performance is not indicative of future results. You should consider whether you can tolerate such losses before trading. Please read the full Risk Disclosure.