Shares of Action Alerts PLUS holding Jack in the Box (JACK) have had some tradable $10+ rallies in the past year. Unfortunately, they have all come within an overpowering one-year downtrend.
It is hard not to notice that JACK has been under selling pressure for months (chart above), and the On-Balance-Volume (OBV) line has been down for much of that time. Prices are below the 50-day and 200-day moving averages, and the slope of these averages has been bearish since early September. A recent downside gap after a long decline reinforces the bearishness, in my opinion.
This longer term JACK chart (above) underlines my bearish outlook. Prices broke below the 40-week moving average, and it didn't take long for the slope of the 40-week to turn down, too. Sometimes a stock will bounce in an attempt to retest the 40-week moving average from the underside, but not with JACK. The OBV line is pointed down on this timeframe and the Moving Average Convergence Divergence (MACD) oscillator is bearish. What next? The $70 to $80 area is now overhead resistance and the $60-$55 zone is the next support area, with $40 the next lower level if the first support area breaks. Remember that it hasn't paid to fight the trend.