Warren Buffett, the head of Berkshire Hathaway Inc. (BRK.B) (BRK.A) , will be bringing his A-game this weekend to his annual shareholder confab in Omaha, Neb. Despite his long-run Midas touch with buying undervalued companies, the charts and indicators of Berkshire the stock are toppy. Berkshire will hold its 2018 Annual Shareholders Meeting on Saturday, May 5 and I seriously doubt that charts and technical analysis will be used. My job is safe for now. Let's check out some charts and indicators before investors head to the airport.
In this daily chart of BRK.B (the more active B shares), below, we can see that prices are below the declining 50-day moving average line. A bounce last month failed at the underside of the 50-day average line. Prices appear to be just a few dollars above the rising 200-day line. A weak close below $192 with heavier than normal volume is likely to break the average line and the low closes seen in early February and late March.
Trading volume has been declining since early February as prices have traded sideways to lower in a tighter and tighter range. The daily On-Balance-Volume (OBV) line has been neutral/flat the past four months unlike the previous rising trend from May. The Moving Average Convergence Divergence (MACD) oscillator is in bearish territory below the zero line.
In this weekly bar chart of BRK.B, below, we can see that prices are testing the rising 40-week moving average line. There have not been a lot of tests of the line the past two years. The weekly OBV line has been weak for the past four months and the MACD oscillator is in a bearish mode and pointed down to the zero line.
This this Point and Figure chart of BRK.B, below, we can see three lows at $193.55. A break of this level, should it occur, would presumably generate some selling. A potential downside price objective of $174 is being indicated.
Bottom line: Everyone probably wants to have a track record like Warren Buffett, but in the short-run the charts of Berkshire Hathaway are toppy and vulnerable, in my opinion.