Diginex Ltd (DGNX) is moving higher on Tuesday after announcing a strategic alliance with Evident Group. The partnership aims to meet growing demand for sustainability data and tokenized assets, and after some recent selling pressure, this news could be exactly what the stock needs to reverse direction.

That's why Diginex is the Stock of the Day.

The Psychology of Support and Resistance

In the stock market, certain price levels carry more weight than others. Successful traders spend their careers learning to recognize these levels, and $13.50 has proven to be particularly important for Diginex.

Back in late September, $13.50 acted as a support level. Some shareholders who sold at this price immediately regretted it when the stock reversed and climbed higher. Classic trader's remorse.

Many of those sellers vowed to buy back in if they could get the same price again. When Diginex returned to this level in late October, they were ready with buy orders. So many orders piled up that $13.50 became support once again.

From Support to Resistance

But when that support broke last week, the dynamic flipped. The buyers who purchased shares at $13.50 suddenly found themselves underwater. Their positions turned into losers, and some made a familiar vow: get out at breakeven if possible.

So when the stock bounced back to $13.50 yesterday, these unhappy buyers placed sell orders, creating resistance. Diginex closed right at this level, testing whether it could break through.

Now that resistance has been broken. The traders and investors who created that selling pressure are gone, cleared out by today's move higher. The news about the Evident Group partnership appears to have turned the tide.

What Happens Next?

With the sellers gone, the stage may be set for a move higher. Here's why: new buyers will need to outbid each other to attract sellers back into the market. They'll have to cut ahead of each other, pushing prices up to entice anyone holding shares to part with them.

This competitive dynamic could push Diginex meaningfully higher. A reversal may have started, and the strategic alliance news provides fundamental support for what the technicals are suggesting.

The combination of breaking a key resistance level and positive news about sustainability data and tokenized assets creates an interesting setup for this stock.