Rexel Shares Drop 2.37% After an 8% Rally Over a Week

Market Tensions and Geopolitical Concerns Weigh on Rexel

Rexel shares are down 2.37% at the start of the session, in a tense market environment. The CAC 40 is down 0.95% during the session, while the SBF 120 loses 0.94%, under the impact of geopolitical escalation in the Middle East following the announcement of a U.S. naval blockade against Iran and the surge in oil prices above 100 dollars a barrel. Although Rexel is not directly exposed to the oil energy sector, the rise in tensions and the increase in energy costs weigh on the entire Paris stock exchange. The correction of the stock comes after a remarkable trajectory: the performance over one year reaches 75.9%, and the gain over three months is established at 10.9%, demonstrating a sustained upward trend in recent months.

Technical Analysis Indicates Potential Overbought Situation

From a technical analysis standpoint, Rexel's share price is at 37.15 euros, just below the upper Bollinger band set at 37.29 euros. The stock is thus trading in the top 98% of its band, a zone that indicates a potential overbought situation. This extreme positioning calls for caution, especially since the RSI (Relative Strength Index) is at 69, very close to the threshold of 70 generally associated with an excessive bullish condition. This indicator measures the speed and magnitude of recent price movements: a high level signals that buying pressure could wane in the short term. However, the stock remains well above its 50-day (35.17 euros) and 200-day (30.87 euros) moving averages, confirming the strength of the underlying trend. The nearest resistance threshold is at 38.10 euros, a level almost tested during the last session on Friday. On the downside, the identified support is at 31.35 euros, well below the current price. The general meeting scheduled for April 22 could be the next catalyst for the stock.