We last reviewed the charts and indicators of Kraft Heinz (KHC) in early May. At the time, the chart was pointed up and we said, "Traders might consider joining Warren Buffett on the long side from $85 if they can risk below the November/December lows."
Looking back at the last two months, we can now see prices reached our buy zone of $85, but it doesn't look like the downtrend is going to reverse. Longs should liquidate their positions, but let me explain.
In this daily bar chart of KHC, above, it looks like prices "fell off a cliff" in June, quickly sinking below the 50-day and 200-day moving averages. These two lagging indicators are now pointed down along with the On-Balance-Volume (OBV) line. Momentum is not, unfortunately, diverging from the weak price action.
This weekly bar chart of KHC, above, shows the decline and the one-month support area around $80. With the weekly OBV line declining since February, it looks like sellers have been aggressive in liquidating positions for several months. The weekly MACD oscillator is in a bearish configuration.
Bottom line: KHC looks weak and could soon test/break the $82-$80 zone of support. A close below $80 is likely to weaken prices further. An oversold bounce is likely only to postpone the break.