We last reviewed Action Alerts PLUS holding KeyCorp (KEY) in March, and we concluded that, "while the price action and upside momentum on KEY have slowed, it is not a top formation, in my opinion. KEY may tread water for another month or two, but we should eventually see a resumption of the bull, with a potential upside target of $37. Weakness below $17 would prompt a reappraisal."
A fresh look at KEY is overdue, so let's check the latest charts and indicators.
In this updated daily bar chart of KEY, above, we can see prices have been trading sideways around $18 since December. Prices have crossed above and below the 50-day moving average line several times over the past seven months. The rising 200-day moving average line is still pointed up, but now only about $1 below the market. The daily On-Balance-Volume (OBV) has been neutral/sideways since December.
If farsighted investors believed KEY was heading higher in the coming months, I would believe these investors would be acting more aggressively in buying. Maybe buyers of KEY have been very good at hiding their footprints, but I doubt it for some reason. The Moving Average Convergence Divergence (MACD) oscillator has been moving slightly above and below the zero line since February and is not giving us any insight into KEY.
In this weekly bar chart of KEY, above, we can see prices are just above the rising 40-week moving average line. A close below $18 would break the line. The weekly OBV line shows a weakening pattern since February in contrast to the neutral pattern on the daily chart. The weekly MACD oscillator is still in a bearish configuration, as it has been since mid-February.
In this Point and Figure chart of KEY, above, we get a different view of the sideways price action this year. Prices show higher lows being made from $16.57. There is a modest price target of $21.59 shown, and a decline to $17.77 would be a short-term negative signal.
Bottom line: I am not convinced KEY can break out on the upside, so existing longs should probably consider raising stop protection to a close below $17. That would break the rising 200-day moving average line as well as the March and April lows.