Applus +: buy looking for annual maximums

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Applus+ is one of the actions that are part of our favorites list which we have recently updated and explained in an online seminar (see “The Spanish shares (ex Ibex35) that we like the most”). On the one hand, the company meets the fundamental criteria: it presents a credible strategy, a reliable management team and sustained growth. On the other hand, the stock is trading at attractive valuation multiples and is showing an upward trend in the background (get a pass with our trend technical indicators).

Applus + on daily chart with amplitude range in percentage, MACD oscillator and trading volume

An analysis of the chart of the action allows us to draw a strategy.

The support is clear and we place it at 7.48 which is an annual minimum and previous resistance zone (dashed fuchsia lines in the graph). Below that level, the base of a prolonged lateral movement is lost and the primary bullish structure is dismantled, so stops should be executed and long or long positions should be disposed of.

In the short term, activity recovers and the price rises accompanied by bullish divergences. Long or long positions can be raised looking for a break of the intermediate resistance located at 8.575 that would incorporate a greater positive moment to the price. From above no serious or significant resistance up to the annual high set at 9,265.

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