Sherwin-Williams Co. (SHW) was last covered way back in the beginning of August where I wrote, "SHW could hold around $330 as this level has acted as support in May." Looking back on the SHW chart this morning (first chart below) we can see that the $330 area held and prices rallied about $100 into early January. SHW corrected lower in January and February and we are looking to see what pictures the charts and indicators have painted for us.
In this daily bar chart of SHW, below, we can see that prices have been trading sideways this month below the slightly declining 50-day moving average line. The 200-day line is below the market and still has a bullish slope.
The daily On-Balance-Volume (OBV) line declined from late January to early February and has moved sideways for much of the month. Overall the OBV line tells us that there was aggressive selling in late January but SHW found support around $390 and the buyers and sellers came into balance. The Moving Average Convergence Divergence (MACD) oscillator is in bearish territory (below the zero line) but the two moving averages that make up this indicator are crossing to the upside for a cover shorts buy signal.
In this weekly bar chart of SHW, below, we can see a more positive longer-term pattern. Prices are above the rising 40-week moving average line. The weekly OBV line shows a positive direction from late 2016 and more buying from this past August. In the lower panel is the weekly MACD oscillator which crossed to the downside in late January. The MACD oscillator is in positive territory so this crossing is only to take some profits on longs and not an outright sell signal.
In this Point and Figure chart of SHW, below, we can see that a rally to $412 will be a small bullish breakout to the upside while a trade down at $380 would be bearish.
Bottom line: The price of SHW has come a long way over the past four years so I would not consider it cheap but the weekly/intermediate-term picture is still constructive so I would look for higher prices on SHW in the weeks ahead. Traders and investors should risk to $380.