GTT Communications, Inc. (GTT) was mentioned in the Lightning Round on Jim Cramer's Mad Money Tuesday night. The stock made a peak in March and has generated a number of sell signals in recent weeks. Let's check the charts to see how much more damage could unfold.
In this daily bar chart of GTT, below, we can see a downtrend in progress the past four months. Support from December to February has been broken and the rising 200-day now represents resistance. The 50-day moving average line is about to cross below the 200-day line for a (belated) sell signal called a dead cross.
The daily On-Balance-Volume (OBV) line has turned down telling me that sellers of GTT have become more aggressive. The Moving Average Convergence Divergence (MACD) oscillator fell below the zero line back in April for a sell signal. It is still bearish.
In this weekly bar chart of GTT, below, we can see that prices are below the cresting 40-week moving average line. The weekly OBV line has made a top and is pointed down. The MACD oscillator is poised to move below the zero line for another sell signal.
In this Point and Figure chart of GTT, below, we can see the break of support and a big decline. A downside price target has been nearly met but further declines look possible.
Bottom-line strategy: GTT is likely to head still lower before buyers return.
