Technical Analysis – Western Union stock halts bearish bias, creating narrow range

Melina Deltas, XM Investment Research Desk

Western Union stock price has been underperforming in the past two days, breaking back below the 50-period simple moving average (SMA). When looking at the bigger picture, the pair was in a negative move before it started consolidating after finding a floor at the 14-month low of 17.45.

Momentum indicators are pointing to a neutral to negative bias in the short term with the RSI just below 50 and the stochastic oscillator deep in oversold zone. Also, the SMAs are following the price action, diving even lower.

Further losses should see the 14-month low of 17.45 acting as a major support as this is also where the lower boundary of the trading range holds. A drop below this area would reinforce the bearish structure in the medium-term and open the way towards the next key support level of 16.40, identified by the trough on December 2018.

In the event of an upside reversal, the 50-period SMA currently at 19.13 could act as a barrier before being able to re-challenge the 23.6% Fibonacci retracement level of the down leg from 28.40 to 16.40 at 20.00, where the 100-period SMA is located. A break above this level and the 20.15 resistance would send price to 20.85. Further gains would lead the way towards the 38.2% Fibo of 21.57.

However, for a resumption of the longer-term downtrend, which was halted in April, the stock would need to beat the 14-month low.