PNC Financial Looks Vulnerable to a Decline

 | Mar 17, 2017 | 2:24 PM EDT
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PNC Financial Services Group  (PNC) made a big rally into February from last June, but a weakening picture of volume and momentum tells me it is time to take profits on PNC as it looks vulnerable to a decline.

In this daily bar chart of PNC, below, we can see the rally from the June low to the early 2017 high. The volume of trading peaked in November and declined every month since. The rising 50-day moving average line has tracked the rally nicely and was tested on a short dip in January. As prices have weakened this month they are getting into position for another test of the moving average line. The slope of the 200-day moving average line is positive but may be too far below the price action. 

The On-Balance-Volume (OBV) line has peaked and weakened slightly this month. The bearish divergence between the higher price highs and lower momentum readings is more noticeable in November and February.

In this three-year weekly chart of PNC, below, we can see that prices are too far above the rising 40-week moving average line. When prices get too far away from a major moving average they often have a return move. The weekly OBV line is positive but the weekly Moving Average Convergence Divergence (MACD) oscillator is just about to cross to a liquidate longs sell signal.

In this Point and Figure of PNC, below, we can see the sprint higher with no nearby support. PNC could correct to the $115-$110 area or even lower.

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