MasterCard (MA) -- a holding in TheStreet's Trifecta Stocks portfolio -- looks like it has made a large topping formation the past year or so as a number of rallies have failed to sustain a move to new high ground. The latest rally from the July low looks like it, too, will fail. Let's dig deeper to see if any of our payments have been late...
In this daily chart of MA, above, we can see the October, November, December 2015 top and the subsequent decline to a February low. From the low earlier this year MA rallied once again to a lower high in April, May, June. Prices turned down to an early July low before another rally back to the resistance in the April, May, June period.
The daily On-Balance-Volume (OBV) line has followed prices up and down and up and down. Prices are now over the flat 50-day and 200-day moving averages but it will not take much of a decline to break back below these average lines.
In this three-year weekly chart of MA, above, we can see a possible "left shoulder" of this topping pattern in the summer of 2015. The "head" is formed in the fourth quarter of last year and the right shoulder (or will it be two right shoulders?) have developed this year. Prices are just slightly above the gently declining 40-week moving average line. The OBV line on this time frame looks like it has rolled over.
The Moving Average Convergence Divergence (MACD) oscillator has declined back to the zero line. The MACD could continue lower to below the zero line and a sell signal or it could turn back up again. We should be objective and not trade with our "gut" but my gut tells me we are going to see more sell signals for MA.