United Rentals (URI) bounced recently, and climbed above the declining 50-day moving average line, but prices are well off their morning highs, signaling a probable reversal to the downside.
Taking a step back, we can see that prices have been weakening since early March and further declines to major support around $80 is possible in the weeks and months ahead. Let's check the latest charts and indicators.
In this daily candlestick chart of URI, above, we can see how prices topped out in February and March. By the end of March, URI was trading below the 50-day moving average line and in early April, rallies to the underside of the average line failed. April ended with a gap to the downside and increased volume. In June, URI closed below the rising 200-day moving average line but recently rallied back above it. Today's candle pattern shows a large upper shadow as prices are currently well off their best levels of the day.
The On-Balance-Volume (OBV) line peaked in February/March and has been weakening. A declining OBV line is a sign of more-aggressive selling as the math for the line tells us that volume is heavier on days when URI closes lower. The Moving Average Convergence Divergence (MACD) oscillator has been in bearish territory below the zero line since April.
In this weekly bar chart of URI, above, we can see that prices are a fraction above the rising 40-week moving average line, but it will not take much of a decline to close below the average. The weekly OBV line has been declining since early February. The weekly MACD oscillator turned lower in March and is almost crossing the zero line for an outright sell signal.
Bottom line: Aggressive traders could sell URI here on this bounce or on a close below $101. Next major support, looking at the weekly chart, is down around $80.