A Major Top Formation Continues to Unfold for Symantec

 | Feb 02, 2018 | 8:25 AM EST
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I wrote about the technical chart weakness on Symantec Corp. (SYMC) back in July and said, "It looks like SYMC is making a lopsided double-top pattern with a lower second peak. The initial downside price target from this pattern measures to the $23 area. I have no idea what the fundamental story is on SYMC, but I would want to review my portfolio if I owned shares." Here we are six months later and I can see how this bearish forecast is playing out. Let's review some updated charts.

In this daily bar chart of SYMC, below, we can see that prices made another rally attempt in August and September to make a larger top pattern. From a slightly higher September peak prices have declined to break below the July and August lows. SYMC is trading below its declining 50-day moving average line and the declining 200-day line.

The daily On-Balance-Volume (OBV) line made its high back in May/June and each subsequent high has been lower than the prior one telling us that sellers of SYMC have been more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator is pointed lower after failing at the underside of the zero line.

In this weekly bar chart of SYMC, below, we can see that prices are below the declining 40-week moving average line. A rally in early January stopped short of the line. The weekly OBV line has been rolling over for months signaling more aggressive selling. The weekly MACD oscillator is bearish.

In this Point and Figure chart of SYMC, below, we can see a pattern of lower lows and lower highs. A price target of $22.55 is displayed.

Bottom line: SYMC still looks weak and investors should avoid this name. Accomplished traders who want to approach the short side should risk a close above $30 looking for declines to the $22 area.

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