Mondelez International: Which Way Will It Go?

 | Jun 22, 2017 | 11:37 AM EDT
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mdlz

Mondelez International (MDLZ) continues to disappoint the bulls. We talked about MDLZ at the beginning of June and its recent price dip continues to frustrate the longs unfortunately.

Let's check our updated charts and indicators on MDLZ and see if we should change our strategy to fit better to the price action so far.

In this daily bar chart, below, we can see that MDLZ broke out over the highs going back to last July as it traded above $47 in early June. Unfortunately, the gains were not long sustained and prices have decline to close below the rising 50-day simple moving average line and are within striking distance of the 200-day moving average.

The volume pattern does not show increasing volume as prices moved higher in May and the On-Balance-Volume (OBV) line has been declining since February, telling us that sellers of MDLZ have been more aggressive than buyers. The trend-following Moving Average Convergence Divergence (MACD) oscillator generated a take profits sell signal in early June and is close to crossing below the zero line for an outright sell signal.

In this weekly bar chart of MDLZ, below, we can see that prices are still above the rising 40-week moving average line. The uptrend is positive but not robust. On this weekly timeframe the OBV line is bullish and has been rising the past three years. The weekly MACD oscillator is in a similar position to the daily chart and is about to cross to a take profits sell signal.

This Point and Figure chart of MDLZ, below, shows a "high level" consolidation pattern. A trade at $48 would be a breakout but a trade at $44 would turn the column to Os. There is support at $42 and $41 and a trade at $40 would be bearish.

Bottom line: MDLZ is in technical limbo. The chart doesn't look strong enough for an upside breakout right now and yet things have not weakened enough to get bearish. The best strategy right now might be to keep MDLZ on your market minder and look for other stocks that are moving.

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