Boston Beer (SAM) has been in a prolonged downtrend. If it wasn't a beer company we might say it was a drought. However, a bullish divergence this year is pointing the way in the weeks ahead to a rally, which can eventually become an important bottom.
Full disclosure -- I do indulge.
Before it gets to be 5 o'clock let's look at the charts and indicators.
In this daily chart of SAM, below, we can see the lower lows and the lower highs that define a simple downtrend. Prices are below the declining 50-day and 200-day moving average lines. But notice that recent dips below $140 look like they have been bought. Also, do you see that the last bounce stopped at the underside of the 50-day average line? This might not happen on the next bounce.
Yes, the On-Balance-Volume (OBV) line is declining but that might change soon. In the lower panel is the real reason for my optimism -- a bullish divergence. Since January SAM has made lower lows but momentum has made higher lows. This bullish divergence tells us that the pace of the decline is slowing and this can foreshadow a rally.
In this weekly chart of SAM, below, we can see the decline from early 2015 and that prices are still below the declining 40-week moving average line. The weekly OBV line is weak but may be at the end of its decline. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line but has begun to narrow toward a cover shorts buy signal.
In this Point and Figure chart of SAM, below, we can see the long downtrend. The "4" on the chart is the first entry for April. It will take a rally to $151.33 to put prices in an up column of Xs.
Bottom line: Wine, beer or spirits? It's all good and a close above $150 will be a close above the high of the low week. This simple reversal pattern is probably going to get SAM moving again.