Tyson Foods (TSN) technical analysis – Tyson Foods (NYSE:TSN)
Tyson Foods Inc. TSN shares continue to slide lower on Tuesday. This comes after yesterday’s decline of more than 7%. Earnings came in at 92 cents, which was slightly ahead of estimates. But the $13.07 billion of revenue was lower than the $13.14 billion analysts were looking for.
Despite today’s move, there is a good chance that it could reverse and head higher. This is why we have made it our Stock of the Day.
Sometimes, technical market dynamics can be more important than the fundamental news that has been reported. For example, as you can see on the chart, despite yesterday’s news and panic sellers, the stock found a bottom right around $54.25.
It wasn’t a coincidence there was support around this level. Levels that had previously been bottoms can become so again if a stock drops back to them.
This happens because of people who sold their shares when it was at support. A number of them regretted their decision to sell when the price rallied afterward. Some of them decided that if and when it was eventually possible, they would buy their shares back if they could do so at their selling price.
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So when Tyson fell back to around $54.25 in January 2025, remorseful sellers from July 2024 came into the market as buyers. The large number of these orders they placed caused support at the same price.
A similar thing just occurred. On Monday, the low trade was right around this price, and the last two times the stock found this support, a rally followed.
Stocks tend to rally after they drop to support. This occurs when the traders and investors who created the support with their buy orders become aggressive.
They are concerned that others who wish to purchase shares will be willing to pay higher prices than they are. They know that if this happens, the sellers will go to them.
These concerned buyers don’t want to miss their trades, so they increase the prices they are willing to pay. Other concerned buyers see this and do the same.
This can result in a bidding war that could force the price higher. It happened the past two times with Tyson at this support. It may be about to happen again.
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