Industrial-gases giant Praxair Inc. (PX) has weakened this month after hitting slight new highs in July. What does that portend?
I last looked at the stock in December, where I wrote that "I would look for PX to trade sideways between $156 and $145 or so for several weeks. Eventually I would anticipate that PX does start another uptrend, but I don't think it is going to happen right now."
Looking back at the past eight months, my idea of a trading range for PX wasn't that far off from what actually happened, except that prices traveled in a wider range than anticipated (and for longer than several weeks). The stock is trading at $154.71 as I write this.
PX's daily bar chart shows how the stock gapped below its cresting 50-day moving average (the gold line below) earlier this month. Prices have also been testing the rising 200-day moving average (the blue line) for the past week:
Praxair's daily On-Balance-Volume line (OBV) has also been weakening this month, which suggests that sellers have been more aggressive. The daily Moving Average Convergence Divergence oscillator (MACD) is likewise in a bearish mode, falling below the zero line.
The stock's weekly bar chart likewise shows PX testing its rising 40-week moving average line:
The weekly OBV line also shows some recent weakness, while the MACD oscillator has crossed to the downside for a "Take Profits/Sell" signal.
This Point and Figure chart for the stock projects a $140.55 downside price target:
The bottom line: PX looks like it can slip lower that its current $154 or so in the near term. We could see prices test the $150-$145 area, or even retest the stock's April lows around $140.