Visa stock is hovering above the busy 235.75-237.30 area, after climbing to 245.14 on July 17, the highest level since August 2, 2021. It has been an impressive period for Visa bulls since the October 13, 2022 trough with a bullish pattern of higher highs and higher lows developing over this timeframe. The market, though, is now preparing for Tuesday’s Q2 earnings report.

However, the positive news for the bulls appears to stop here. The Average Directional Movement index (ADX) is dropping aggressively and thus pointing to a reversal of the prevailing bullish trend, and the RSI is hovering around its 50-midpoint and appearing unable to make a higher high. More interestingly, the stochastic oscillator continues to trade in its overbought territory, showing a strong tendency for a downside break. If this occurs, it will be seen as a strong bearish signal.

If the bulls are still feeling hungry, they would try to stage another rally targeting the recent high of 245.14. If successful in breaking this level, they could then have a chance at recording a new 2023 high and potentially have a go at the July 27, 2021 high at 252.42.

On the flip side, the bears are keen on a move below the busy 235.75-237.30 range that is populated by the April 29, 2021 high and the 78.6% Fibonacci retracement of the July 27, 2021– October 13, 2022 downtrend respectively. The October 13, 2022 upward sloping trendline would then test the bears’ determination, just ahead of the important 227.91-230.94 range defined by the 50- and 100-day simple moving averages (SMAs).

To conclude, Visa bulls are probably treating the current downleg as a much-needed short-term correction. However, the overall technical picture is ready to turn bearish, especially if the 235.75-237.30 area is broken.