It seems that some market observers feel that BT Group's (BT) ADRs are an attractive purchase in the wake of market weakness from the Brexit vote. This has to be based on the fundamentals.
Technicians behave differently from fundamental analysts. A fundamental analyst will buy in adversity. In other words, they will buy a stock in a downtrend because the valuation is compelling. A technical analyst or chartist prefers to buy stocks in an uptrend -- and may buy a pullback within an uptrend. Let's take a look at the trends.
In this daily chart of BT, above, we can see that prices have lost ground over the past twelve months. Prices have been below the downward-sloping 50-day and 200-day moving average lines since February. The decline accelerated to the downside this month. The lower panel shows the 12-day momentum study, and there is no bullish divergence to foreshadow a turnaround to the upside.
This weekly chart of BT, above, tells me not to fight the trend. Prices rolled over in 2014 and 2015, and the downtrend began in earnest in 2016 -- and picked up steam when the $31 support area was broken. Prices are below the declining, 40-week moving average line.
The weekly OBV line has been declining since November, telling us that sellers have been more aggressive and longs have been liquidated. The 12-week momentum study in the lower panel is not showing any bullish divergences that might suggest that a bottom could be forming. I will let the fundamental analysis buy the falling knife. I prefer to wait for evidence that the decline is finished.