The charts of Fiat Chrysler Automobiles NV (FCAU) were weakening since the middle of April after a slightly lower high after its January zenith. The latest corporate news of CEO Sergio Marchionne stepping down due to health reasons and another top exec leaving the firm has weakened prices Monday so this is a good time to look at the charts and indicators to assess the risks and rewards.
In the daily bar chart of FCAU, below, we can see an "irregular" downtrend since January. Prices are tracing out a wide downward sloping channel. FCAU is below the 50-day moving average line and below the cresting 200-day average line with a rally failure to the underside of the line earlier this month.
The daily On-Balance-Volume (OBV) line shows a peak in late January and a downtrend telling us that sellers have been more aggressive for months. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been mostly bearish since late January.
In this weekly bar chart of FCAU, below, we can see a bearish alignment of indicators on this longer time frame. Prices are below the flattening 40-week moving average line. The weekly OBV line has been pointed down the past three to four months and the MACD oscillator is poised to cross below the zero line for an outright sell signal.
In this "traditional" Point and Figure chart of FCAU, below, we can see a downside price target of $13.
In this "percentage change" Point and Figure chart of FCAU, below, we have only a slightly lower price target of $18.86. A decline to $18.13 would be a new low for the move down and would probably precipitate further declines.
Bottom line: The charts and indicators of FCAU were bearish before the latest corporate news. The daily chart shows potential support in the $18-$17 area and that may contain the decline but a close below $17 will open the way to still further losses.
