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- The housing market in the UK has been suffering as a whole.
- The company has seen a downtrend after the interest rate hike.
- The price has bounced off its support levels and is looking to take a hit.
Persimmon PLC (LON: PSN) stock price has declined by more than 20% after the interest rate hike was put into action by the Bank of England. Moreover, factors like the record high inflation rate and the ‘help to buy’ government scheme have also played a major role in inducing fear in the housing market.
The housing market as a whole is facing challenges in the UK. Housing giants like Aylor Wimpey and Berkeley Group are also expecting a decline in their revenues by more than two digits, while also seeing an increase in their operating costs. This financial instability will affect the net profit in the end.
Technical Analysis and Price Prediction
As of the current trading session, PSN stock is trading at £1059. The recent price action has seen the bulls facing resistance at the £1212 level, followed by a pullback to the immediate support at £991. The price is currently consolidating within this range. In the event of further downward movement, the second support level is at £889, while the second resistance level is at £1380.
MACD, EMA, and RSI levels
In terms of technical indicators, the 50 EMA, currently at £1097, has been acting as a strong resistance level for PSN stock since March. On the other hand, the 200 EMA is positioned higher, at £1380, and hasn’t been touched by the stock’s price since January 2022.
Regarding the MACD, it recently made a bullish crossover with its EMA, indicating potential positive momentum. Both MACD lines are presently below the neutral zero level, with the MACD line at -21 and its EMA at -25.
The relative strength index (RSI) has shown a trend reversal, with the RSI line rising to 47 after bouncing off oversold levels at 36. This resulted in a bullish crossover of the RSI line with its SMA line at the end of August. These indicators suggest potential for bullish momentum in the stock.
What is the price prediction for PSN stock?
The price prediction for the PSN stock will be bearish if the price bounces off from its 50 EMA. Otherwise, crossing it will lead the bulls to touch the immediate resistance level of £1212. Given the RSI’s indication of bullish strength, a strong upward momentum could potentially lead to a breakout above the resistance level. For traders looking for a safer entry point, it may be prudent to consider buying once the price rises. And successfully sustains itself above the first resistance level.
Technical Levels
Support:£991, £889
Resistance: £1212, £1380
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
