Legg Mason (LM) faces an uphill battle. It is in a weak sector. The stock's chart is pointed down. And now, we can add a downgrade from TheStreet's Quant Ratings service to its woes.
Shares of LM have been put on sale and the stock is down more than 50% from its peak. Prices have been losing ground during the past 12 months, but more so in the last three months. The On-Balance-Volume (OBV) line is in a downtrend and there are no bullish divergences to come to the rescue. There's no help from our math-based indicators, either. The 50-day and 200-day moving averages have been in a negative trend for months. In addition, in July there was a death cross, which is when the 50-day average dips below the 200-day average.
This long-term chart of LM, above, shows the peak in early 2015 at $60. It also shows the bearish OBV line on this timeframe and a bearish Moving Average Convergence/Divergence oscillator. If LM breaks the lows of 2011 and 2012, then we could see further weakness down to $15 or so, which is the next support level.