The Costain share (LON: COST) price is having a pullback this week. With the help of the technical analysis, let’s find out if the ongoing correction is a good buying opportunity. At press time, the stock was down 0.91% and was changing hands at 63p.
On a weekly timeframe, this translates into a 1.2% drop which comes after four consecutive weeks of uptrend. However, the weekly uptrend which started back in July 2022 is still intact as you can clearly see higher highs and higher lows.
With the latest bullish push, Costain shares have broken above the April 2023 high of 61.8p which was acting as resistance. If bulls flip this level into a support level, the outlook will become very bullish with an immediate bullish target of 75p.
Even though the daily RSI and MFI indicators have reached the oversold territories, the bullish trend may still continue. This may change if the stock breaks below 61.8p.
According to the latest news, Costain Group has secured a £1.4m contract to accelerate decarbonization in the UK transport infrastructure. As per the details, the engineering firm has been awarded four contracts under which it will provide the UK government consultancy advice.
Therefore, Costain share price forecast depends on the stock’s ability to hold the 61.8p support level. As long as this level holds, bulls have nothing to worry but this week’s interest rate decisions by the Bank of England and the US Federal Reserve may keep the price action volatile in the coming days.
The following chart shows the LON: COST price action on a daily timeframe. The price is still trading almost 16% above its 200-daily moving average despite a 7% correction from the monthly high of 67.2p. This suggests that the bulls still have a lot of momentum.
