PPG Is Looking Toppy Again

 | Aug 01, 2017 | 1:47 PM EDT
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PPG Industries  (PPG) has rallied from October after holding above its key breakdown level at $88 that we described in our October review: "With no reasons to be long PPG, I would take defensive action if you are. A weekly close below $88 is my line in the sand."

PPG climbed for more than eight months, but it did not break above its 2016 highs nor its 2015 highs. Prices gapped lower in July, breaking the cresting 50-day moving average line. Is this trend break the start of a bigger decline or should we begin to treat it as a buying opportunity?

In this daily bar chart of PPG, above, we can see the uptrend from the October low has been broken. The slope of the 50-day moving average line has turned lower but the 200-day moving average line is still positive. The daily On-Balance-Volume (OBV) line has been stalled since early May and has begun to weaken. The OBV line did not confirm the price gains in May, June and early July and now the line is weakening. A weak OBV line tells us that sellers of PPG are more aggressive. The daily Moving Average Convergence Divergence (MACD) oscillator is below the zero line for an outright sell signal.

In this weekly bar chart of PPG, above, we can see a wide sideways market the past three years. Prices are above the rising 40-week moving average line, but it won't take much of a decline to break the line. The weekly OBV line has generally moved up and down with the price action. The weekly MACD oscillator signaled a take-profits sell in July.

In this Point and Figure chart of PPG, above, we can see a column of O's taking prices down to a potential area of support in the $105-$102 zone. It might take a decline to $101 to really weaken the chart.

Bottom line: It looks like PPG has made yet another top pattern and a break below $101 could open the way to declines in the low $90s.

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