Guess? Inc. (GES) "crashed" by falling nearly 18% Thursday. Was this an overreaction or the start of a bigger decline? Let's take a look at the charts and indicators.
In this daily bar chart of GES, below, we can see that overall, GES has rallied from a May nadir. Since late August a broadening pattern has developed -- a widening pattern of higher highs but also with lower lows. Traders gets "whipsawed" between false breakouts on the topside and breakdowns that do not have follow-through.
Prices crisscrossed the rising 50-day moving average line a number of times the past four months. Yesterday, GES slumped below the moving average line and the early January low. The rising 200-day line is slightly below the market and could be tested today or next week.
The daily On-Balance-Volume (OBV) line shows a peak in November so there is a divergence between the weakening OBV line and the new price highs last week. The daily Moving Average Convergence Divergence (MACD) oscillator just crossed to a take profits sell signal.
In this weekly chart of GES, below, we can see that prices are still (for now) above the rising 40-week moving average line. The weekly OBV line has been neutral for the past four or five months. The weekly MACD oscillator is also in a take profits sell mode.
In this Point and Figure chart of GES, below, we can see the big decline with the long column of "O's". A decline to $14.71 could open the way to a decline to the $11.68 area.
Bottom line: With most of our indicators suggesting further weakness we strongly recommend avoiding GES. Prices could bounce a little in the near term but the overall picture is for lower prices in the weeks and months ahead.