Alico (ALCO) is not a household name, but I know it. Before the launch of commodity ETNs, there were a number of financial advisors at the sell-side firm where I worked that were interested in equities that might go up as commodities rose. ALCO came up, and I have followed it on and off over the years. With the downgrade of ALCO by TheStreet's Quant service, I decided to take a fresh look.
This short-term chart of ALCO, above, is pretty negative looking with a persistent downtrend. The selling and liquidation looks like it got under way in June as the On-Balance-Volume (OBV) line turned down and weakened the rest of the year. The Moving Average Convergence Divergence (MACD) oscillator has been below the zero line a lot. Last, we can see a death cross in August as the 50-day average declined below the 200-day average.
This long-term chart of ALCO, above, is not healthy. The OBV line has been down all of last year and suggests that sellers have been more aggressive. The MACD oscillator is below zero and still pointed down. Prices are below the declining 40-week moving average. Prices are testing key support around $35, but a breakdown below $35 would open the doors to the $30 to $35 area in the weeks and months ahead.