Weatherford International (WFT) has been on the defensive the past two years, and it looks like the dark clouds have not yet lifted for this name.
In the past 12 months, WFT has traded weak, (chart above). Prices are below the declining 200-day moving average line and below the flat 50-day moving average. The On-Balance-Volume (OBV) line was declining from May 2015 to the end of February this year, showing that sellers have been more aggressive for months.
Recently, in March and April, the OBV line picked up, but prices broke to the downside this month. Prices could hold in the $6 to $5 area, the previous low, but we have yet to notice a bullish divergence between the price action and the momentum study in the lower panel. A bullish divergence is not a necessary component of a bottom formation, but it can help in identifying it.
In this weekly chart of WFT, above, we can see a significant decline the past two years, with three big waves lower. Bear markets can break down to three and sometimes more waves/cycles. WFT may have started a fourth wave lower, but I would like to see more evidence. This chart shows that every rally to the underside of the 40-week moving average line has failed.
The moving average convergence divergence (MACD) oscillator is bearish and the OBV line on a weekly timeframe looks like it too has turned down.
Bottom line, WFT has had a big decline and does have something to reverse, but so far we have not seen sustained accumulation (buying) and constructive price action. If WFT bottoms we probably wouldn't get involved until it climbs back above $9 -- you have to buy the bottom and sell the top to make money in the markets.