Thor Industries, Inc. (THO) is trading sharply lower in pre-market activity Thursday. We have not driven THO around the block since last September, commenting that, "With chart support in the $110-$100 area investors should only worry if THO breaks below the rising 200-day moving average line around $102...there is an upside price target that projects to the $136-$137 area."
THO passed our target area and kept moving higher and higher into January 2018. Prices briefly touched $160 and then rapidly reversed direction. With prices down some $70 from their zenith what do the charts look like now?
(For more on Thor, see Jim Cramer's: "Thor Getting Hammered Is No Canary in a Coalmine")
In this daily bar chart of THO, below, we can see a four-month slide of lower lows and lower highs. THO has been below the declining 50-day moving average line the entire time and now the slope of the 200-day moving average has turned lower.
The daily On-Balance-Volume (OBV) line diverged bearishly from the price action from November to the peak and then turned down with prices. The OBV line has steadied the past six or seven weeks suggesting a balance between bulls and bears.
In the lower panel the 12-day momentum study shows higher lows from February while prices made lower lows. This improving momentum picture tells us that the pace of the decline has been slowing which implies scale down buying.
In this weekly bar chart of THO, below, we can see that prices are below the declining 40-week moving average line. A weekly close below $90 could mean a deeper decline to around $80 or even $70.
The weekly OBV line is still pointed down. The 12-week momentum study shows some slowing in the decline from April.
In this Point and Figure chart of THO, below, we do not have the pre-market activity plotted. The chart still suggests an upside rebound to around $115.
Bottom line: While the pace of the decline has slowed in recent months, THO is still in a downtrend and could make a new low close soon. Avoid the long side of THO until prices stabilize and show signs of fresh accumulation.