The Visa stock (NYSE: V) opened with a negative gap on Wednesday, and continued to trade south, breaking Monday’s low of 195.80, as well as the upside support line drawn from the low of March 23rd. At the same time, the stock is trading below all three of our moving averages on the 4-hour chart, and below a downside resistance line taken from the high of December 30th. All these technical signs paint a negative near-term picture in our view.
The dip below 195.80 has confirmed a forthcoming lower low and may have opened the path towards the 189.50 zone, defined as a support by the peak of November 3rd. If that barrier is not able to halt the decline, then its break may lead to the low of the day before, at around 183.90. Another break, below 183.90, could see scope for extensions towards the 179.25 hurdle, which provided strong support on October 28th, 29th, and 30th.
Looking at our short-term oscillators, we see that the RSI slid from near its 50 barrier and now lies fractionally above 30, while the MACD runs below both its zero and trigger lines, pointing down. Both indicators detect strong downside speed and increase the chances for this stock to continue drifting south for a while more.
On the upside, we would like to see a strong recovery above 203.50, before we start examining the bullish case again. This may also signal the break above the downside line taken from the high of December 30th, and is likely to initially target the high of January 21st, at 207.15. If that barrier does not hold and breaks, then we may experience extensions towards the peak of January 14th, at 211.30, where another break may pave the way towards the 216.30 area, marked as a resistance by the high of January 8th.
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