Michelin Stock: 3.4% Rebound After a Disastrous Week

Immediate Recovery Amidst Ongoing Challenges

Michelin recorded a 3.4% gain this Thursday, closing at €27.09 compared to €26.20 the day before. This recovery follows a particularly difficult period for the stock, which lost 12.22% over the last seven days. The drop was primarily concentrated in Tuesday's session, where the stock fell nearly 9% to €26.11, following the announcement of a profit warning. Indeed, on Monday evening, the group lowered its operating profit forecast for 2025, now expected to be between €2.6 billion and €3 billion, down from over €3.4 billion previously. This downward revision, justified by a more marked deterioration than expected in North America, where volumes fell by nearly 10% in the third quarter, triggered a wave of massive sell-offs. The trading volumes on Thursday accounted for 0.5% of the capital, a moderate level indicating a return to calm after the previous days' turmoil. Technically, the day's rebound occurred in a critical zone. The Relative Strength Index (RSI), which measures the speed and magnitude of price movements, is at 18, a level considered very oversold. Generally, an RSI below 30 suggests that the stock has been heavily sold and that a technical rebound could occur, without indicating a trend reversal. The stock touched its support threshold on Tuesday at €26.11, which was precisely the session's low, before rebounding. This recovery from the support illustrates a classic reaction after an excess of selling, especially as the market context was more favorable this Thursday, with a significant rise in the CAC 40.

Unfavorable Medium-Term Dynamics

The medium-term dynamics remain unfavorable. The stock is now significantly below its moving averages, an indicator that smooths out price variations to identify the prevailing trend. The 50-day moving average is at €30.99, while the 200-day average is at €32.16, respectively 14.4% and 18.7% above the current price. This configuration, where the stock remains below its key averages, indicates sustained selling pressure over several weeks. The MACD, an oscillator that measures the divergence between two exponential moving averages, also displays a negative signal, with a line at -0.89 and a signal line at -0.39. The MACD histogram, at -0.51, confirms that the bearish momentum has not yet been absorbed despite the day's rebound. Over a broader horizon, Michelin has declined by 15.48% over three months and 19.66% over a year, a performance that contrasts sharply with that of the CAC 40, which is up 8.86% over the same period. The Chaikin Money Flow, at -0.12, further indicates that capital flows remain downward, suggesting that sellers maintain the initiative. The immediate resistance now stands at €31.58, a level the stock must surpass to consider a lasting stabilization. With a beta of 0.12, Michelin shows very low sensitivity to market movements, which may limit the extent of variations in case of a rebound or further drops in the CAC 40.

Technical Rebound in a Favorable Market Context

The technical rebound observed this Thursday occurs in a more favorable market context, as the CAC 40 advanced by 1.38%. This Parisian improvement comes after the rejection of two motions of censure targeting the Lecornu government, a political event that reassured investors about institutional stability. However, for Michelin, this recovery only partially compensates for the severe correction suffered at the beginning of the week. The one-month volatility, measured at 10.56%, reflects significant price movements but remains within a relatively contained range considering the recent sharp drop. The Average True Range (ATR), at €0.49, confirms that the average daily variations of the stock have remained moderate in recent weeks, except for Tuesday's session, which marked a sharp break. The On-Balance Volume (OBV), at -9.73 million, reflects a negative balance of cumulative volumes over several weeks, underscoring the persistence of selling pressures.