V.F. Corp. (VFC) was analyzed at the end of November and I recommended," VFC has gained nearly 50% this calendar year. Not bad at all, and with momentum slowing the past six weeks, I would recommend nailing down or booking some profits. Raise sell stops on the remaining position to a close below $69."
Prices dipped in early December but rallied into February before a deeper correction. Traders should have sold part of their holdings, riding the rest higher. The short-term trend has shifted from up to sideways so the question now is what should be our new strategy?
In this daily bar chart of VFC, below, we can see that prices spent a number of weeks below the 50-day moving average line. The slope of the line turned negative in early March. Last week VFC closed above the 50-day line but it may not be out of the woods. The daily On-Balance-Volume (OBV) line has been positive the past 12 months but recently the line has not shown much upside. The Moving Average Convergence Divergence (MACD) oscillator turned up from below the zero line in early March for a cover shorts buy signal. The oscillator is poised to cross the zero line now for an outright go long signal.
In this weekly bar chart of VFC, below, we have mixed signals. Prices are above the rising 40-week moving average line. The weekly OBV line dipped from January into February but has since firmed. A new high on the OBV line would be welcomed if it occurs. The trend-following MACD oscillator is in a bearish take profits mode the past two months but the two moving averages that make up this indicator have begun to narrow.
In this Point and Figure chart of VFC, below, we can see an upside price target of $87.64 and that the $78-$83 area could act as resistance. Also, we see that a break of $72.27 would be bearish.
Bottom line: Traders and investors should be more cautious of the long side of VFC in the next few weeks. Price-based indicators look better but volume-driven indicators suggest we should tighten stops to $73.