I haven't looked at the charts of Anheuser-Busch InBev (BUD) for a long time. Visiting with some updated charts this morning I can see a long downtrend. Prices may have reached an area where buyers may return but it is likely to be a long process of base building. Let's check.
In the daily bar chart of BUD, below, we can see a clear downtrend from October. Lower highs and lower lows. The slope of the 50-day moving average line has been negative since November and prices are still below it. The slower-to-react 200-day simple moving average line turned bearish in February. We can also see that the 50-day line fell below the 200-day line in late December for a bearish dead cross.
The volume pattern is interesting in that it has been heavier since February. The heavier volume means that sellers are more aggressive but also that someone else may be buying on a scale down. The daily On-Balance-Volume (OBV) line shows a peak with prices in October and another decline from March.
In the bottom panel of this first chart is the Moving Average Convergence Divergence (MACD) oscillator which last month crossed to the upside for a cover shorts buy signal.
In this weekly bar chart of BUD, we can see the past three years of price action. Longs have had a hard time. Prices are below the declining 40-week moving average line. The weekly OBV line peaked in late 2016 and made new lows in the past two months. The weekly MACD oscillator is the only positive I see as it has begun to narrow toward a possible cover shorts signal.
In this Point and Figure chart of BUD, below, we can see the decline. Prices have exceeded a downside price target. BUD may need to rally to $102.38 to turn the chart more positive.
Bottom line: Regular readers of Kamich's Korner should know by now that it is rare I recommend going long a stock in a downtrend. Some may be attracted to a yield close to 5% and that is certainly enticing. The low of May is a risk point (May 29) and we do have a quick reversal with "a close above the high of low day." Patient investors could initiate a small long position near $95 risking below $91.