Whirlpool Corp. (WHR) was reviewed back in October where I wrote "In this Point and Figure chart of WHR we can see the head-and-shoulders top pattern this year. A downside price target of $143.72 is projected. Whether you believe in chart patterns or not, the chart of WHR is weak and the stock is likely to trade still lower."
Six months later and we just missed the Point and Figure price target of $143.72 by around $2 - not bad for tea leaves and voodoo. What are the charts indicating now?
In this updated daily bar chart of WHR, below, we can now see a more positive outlook. Prices have bounced off the early April lows to test the underside of the still declining 50-day moving average line.
The level of trading volume increased recently and the daily On-Balance-Volume (OBV) line has started to move up signaling more aggressive buying. In the lower panel is the 12-day price momentum study.
Momentum has been making higher lows since February as prices made lower lows into early April. This difference is a bullish divergence and can foreshadow stronger prices ahead.
In this weekly bar chart of WHR, below, we can see that prices are below the declining 40-week moving average line. At $145 WHR held the late 2016 low.
The weekly OBV line has been been in a downtrend from July of last year but the strength showing this month looks like it can break this decline.
The Moving Average Convergence Divergence (MACD) oscillator is narrowing towards a possible cover shorts buy signal in the weeks ahead.
In this Point and Figure chart of WHR, below, we can see a small base pattern and an upside price target of $174. More basing is possible but this is a start.
Bottom line: Yes, WHR is still in a longer-term downtrend, but we are now seeing enough positive technical evidence to recommend shifting positions and to play for an upside move.