Paccar (PCAR) has stalled and could remain in neutral a while longer before it resumes its higher trend.
Let's check the truck maker's charts.
In this daily chart of PCAR, above, we can see prices are higher than they were 12 months ago but the path higher has not been smooth and easy. Pullbacks and retracements have been relatively deep and drawn out over a number of months. Prices are above the rising 50-day moving average line, but the line has been tested a few times in the past five weeks.
Tests of a moving average tell us there is buying interest in the stock, but they also show us that upward momentum has slowed from the pace seen in November and December when prices were well above the 50-day line. The On-Balance-Volume (OBV) line has been declining the past three months and suggests that despite the higher price pattern, sellers of PCAR have been more aggressive, with heavier volume traded on days when PCAR has closed lower. The Moving Average Convergence Divergence (MACD) has been weakening since mid-December, and while it is still above the zero line, it could soon slip below the line for an outright sell signal.
This weekly chart of PCAR, above, has a stronger technical picture than the daily chart. In this three-year chart, we can see PCAR is above the rising 40-week moving average line. The volume of trading in the past year looks like it has been heavier than the pace in 2014 and 2015. The weekly OBV line is bullish as it has moved up with the price action. The weekly MACD oscillator has been above the zero line (bullish) since May, while the two lines of the indicator have narrowed toward a possible crossover and liquidate-longs sell signal.
Bottom line: A weakening daily chart and indicators suggest PCAR could trade sideways to lower within a $70 to $64 range. Traders should wait for a successful test of $64 and then a move back to the upside before considering buying. A close below $64 would prompt a reappraisal.