Baxter International Inc. (BAX) has declined recently to break the rising 50-day moving average line. Is there more downside risk just ahead or should be look at this weakness as an opportunity to do some buying? Let's check out the charts and indicators.
In the updated daily bar chart of BAX, below, we can see that prices made a small gap to the downside with heavy volume. Prices broke the bullish 50-day moving average line and have continued lower. A retest of the support in the $70-$68 area.
The rising 200-day line intersects at $68. The daily On-Balance-Volume (OBV) was steady ahead of this recent dip so we don't have a signal that sellers had become more aggressive in advance of the decline. The Moving Average Convergence Divergence (MACD) oscillator has been in a take profits sell signal since early June and is now close to the zero line. A decline below the zero line would be a negative.
In this weekly bar chart of BAX, below, we can see the strong rise over the past three years. Prices are still above the rising 40-week moving average line and the line has survived earlier tests. The weekly OBV line does not show signs of weakness but that could change. The weekly MACD oscillator has narrowed and could cross to the downside for a weekly take profits signal.
In this Point and Figure chart of BAX, below, there is a downside price target of $67.40.
Bottom line: BAX has been in a long-term uptrend and only recently pulled back. For now I would look for the longer-term bull to dominate and give us a buying opportunity in the next few weeks.