Aviva Share Price: Bulls Must Defend $422.5 to Retain Upside Bias

Summary:

The bulls must defend the $422.5 support for the Aviva share price to retain the upside bias to its trend move.

The Aviva share price is trading lower on the day, following the general market direction of the FTSE 100 this Tuesday morning. After UK banking and insurance stocks dived on Tuesday, the Aviva share price is down 0.54%. However, the stock has pared some initial losses as the bulls aim to mount a resurgence on the stock to follow through from Monday’s 0.63% gain.

There appears to be a spillover effect from Germany, where an unnamed entity is rumoured to be planning a large sale of Deutsche Bank and Commerzbank stocks. The deal is said to be worth billions and is creating some uncertainty around banking and insurance stocks.

The correction move was accelerated on 7 April when Barclays bank downgraded the stock from overweight but upped its Aviva share price target from 468p to 480p, which helped to limit the downside move.

The Aviva share price is currently sitting on the 422.5 support level, following the completion of the measured move from the bearish flag on the 4-hour chart. This measured move extended the correction from the uptrend move that kicked off on 8 March and ended on 29 March with the Doji candle at the 460.5 resistance.

The intraday violation of the 422.5 support has been rebuffed by the bulls, who have initiated a bounce that is attempting to cover the day’s opening gap. However, this move appears to have retained the sanctity of this support. A bounce here sends the price towards the 438.5 resistance (23 February/24 March highs), leaving 447.1 and 460.5 as the next targets to the north.

On the flip side, a decline below the 422.5 price support with a 3% penetration close confirms the breakdown of this pivot. This scenario opens the door for the 408.2 support (24 February/15 March lows) to come into the mix as the next downside target. Finally, additional support is seen at the 400.0 psychological mark, which doubles as the previous low of 10 March, and 396.7 (9 March high in role reversal).