Stock of the day: Saint-Gobain

By Tomasz Wisniewski|

Published: June 10 2022, 10:20 GMT+0

Stock of the day: Saint-Gobain

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We end this week with an analysis of Saint-Gobain. It’s not the first time we talk about this French company. We analysed SGO’s chart at the end of the year. The price back then was around 61 EUR and we were rather bullish:

“The price breaking this resistance would mean an amazing long-term buy signal. On the other hand, the price closing a day below the orange support would mean a signal to sell. The first option looks more probable at the moment.”

Interestingly, SGO broke that resistance almost immediately, reaching the 67 EUR mark in the middle of January. That was a good call! 67 EUR was too much though and happened to be a local resistance. Since then, the price dropped, forming a symmetric triangle pattern. The last three weeks brought us a breakout to the upside, which happened to be a false one. False breakouts are usually great signals to trade in the opposite direction. It was not different here, especially since the negative sentiment was strengthened by the Head and Shoulders pattern (yellow) bouncing off of a resistance on the 58 EUR.

Currently, the price is aiming for the mid-term up trendline (black, in the same time, it is the lower line of the triangle mentioned above). Contact with this support may be an occasion for a bounce but still that would be far from a proper buy signal.

The sentiment remains negative and the current price has a bigger chance for a breakout of the black support rather than sustainable bounce. My view on Saint-Gobain is negative.

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