Last night during "Mad Money," our own Jim Cramer sat down with Doug Pertz, president and CEO of Brink's Co. (BCO) . This security services and cash management company announced the acquisition of rival Dunbar in May, a deal that closed Monday. It is all well and good that there will be cost synergies between the two entities and Cramer is a fan of the company, but I need to see what the charts look like. Maybe the news has been discounted?
In this daily bar chart of BCO, below, we have some interesting technical developments. Prices have traded sideways to lower the past 12 months. The slope of the 200-day moving average line has turned from up to flat to down. The daily On-Balance-Volume (OBV) line has been declining from October and suggests that sellers of BCO have been more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator has crossed above and below the zero line, but is currently below it in a bearish mode.
In this weekly bar chart of BCO, below, we can see that prices tripled over the past three years. The 40-week moving average line has turned flat to lower and prices are just holding above it. The weekly OBV line has been in a sideways pattern since last September and has weakened the past two months. The weekly MACD oscillator is poised to cross to the downside for a take-profits sell signal.
In this Point and Figure chart of BCO, below, we can see a distribution (selling) pattern and a downside price target of $66. A decline to $66 could well open the way for further declines.
Bottom line strategy: BCO looks like it is heading lower in the weeks and maybe months ahead. A rally to $85 would strengthen the chart, but the $66 area is the downside price target in the meantime.