Technical Analysis – The calm before the storm for Visa stock?
June 21, 2023 1:26 pm
Visa stock has recovered from the May 31, 2023 dip but has failed to make significant gains. It remains under pressure despite the overall bullish market sentiment, and it is hovering inside the 228.44-225.96 range. There is a sense of anticipation in the market as both the simple moving averages’ (SMAs) convergence and the tightening Bollinger bands point to an imminent move.
The momentum indicators are on the fence at this stage. The Average Directional Movement index (ADX) is pointing to a range-trading market, and the RSI is hovering around its 50-midpoint without an obvious trend. More interestingly, the stochastic oscillator is on a bearish path, registering lower highs and obeying the downward sloping trendline. A break above this trendline would constitute a significant bullish signal.
Should the bulls decide to break the deadlock, they would like to quickly clear the 228.44-225.96 range set by the 50- and 100-day SMAs. They could then set their eyes on achieving a new 2023 high and attempt to break through the equally important 235.75-237.30 area that is defined by the April 29, 2021 high and the 78.6% Fibonacci retracement of the July 27, 2021– October 13, 2022 downtrend respectively. Even higher, the path looks clear until the July 27, 2021 high of 252.42.
On the flip side, the bears would try to push the stock towards the 61.8% Fibonacci retracement at 222.65 and the May 12, 2021 low at 220.08. If successful, they could then face the busy 213.46-214.09 area. Breaking this range would most likely change the outlook for the rest of 2023.
To conclude, the current delicate balance in Visa is close to breaking with the bears appearing ready to take advantage of this opportunity.
Visa stock has recovered from the May 31, 2023 dip but has failed to make significant gains. It remains under pressure despite the overall bullish market sentiment, and it is hovering inside the 228.44-225.96 range. There is a sense of anticipation in the market as both the simple moving averages’ (SMAs) convergence and the tightening Bollinger bands point to an imminent move.
The momentum indicators are on the fence at this stage. The Average Directional Movement index (ADX) is pointing to a range-trading market, and the RSI is hovering around its 50-midpoint without an obvious trend. More interestingly, the stochastic oscillator is on a bearish path, registering lower highs and obeying the downward sloping trendline. A break above this trendline would constitute a significant bullish signal.
Should the bulls decide to break the deadlock, they would like to quickly clear the 228.44-225.96 range set by the 50- and 100-day SMAs. They could then set their eyes on achieving a new 2023 high and attempt to break through the equally important 235.75-237.30 area that is defined by the April 29, 2021 high and the 78.6% Fibonacci retracement of the July 27, 2021– October 13, 2022 downtrend respectively. Even higher, the path looks clear until the July 27, 2021 high of 252.42.
On the flip side, the bears would try to push the stock towards the 61.8% Fibonacci retracement at 222.65 and the May 12, 2021 low at 220.08. If successful, they could then face the busy 213.46-214.09 area. Breaking this range would most likely change the outlook for the rest of 2023.
To conclude, the current delicate balance in Visa is close to breaking with the bears appearing ready to take advantage of this opportunity.
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