Our last analysis of Magellan Midstream Partners L.P. (MMP) was way off the mark: "Aggressive traders could go long MMP on a close above $78.50 and add on strength above $80 and $82. I would risk a close below $75 and target the $101 area on the upside." With the benefit of hindsight, Action Alerts PLUS holding MMP never closed above $78.50 to get long but when prices closed below $75 the selling increased.
With prices sinking lower and lower to recently retest the November lows, a fresh look is warranted.
In this updated daily bar chart of MMP, above, we can see a small double-top pattern in January and February. Prices have continued lower below the declining 50-day moving average line. There is a bearish dead cross of the 50-day and 200-day moving averages in late June as the 50-day line fell below the 200-day line. The daily On-Balance-Volume (OBV) line peaked in February as prices peaked and has been on a downward path since. A declining OBV line tells us that the sellers of MMP are more aggressive.
In the lower panel is the 12-day momentum indicator, which has yet to display a bullish divergence to the price action.
In this weekly bar chart of MMP, above, we can see that prices are below the flat 40-week moving average line. There is potential support from late 2015 and early 2016 in the $65-$55 area. The weekly OBV line has been in a decline for much of the past three years and the weekly Moving Average Convergence Divergence (MACD) oscillator is below the zero line (bearish).
In this Point and Figure chart of MMP, above, we can see a couple of things. First, MMP has reached a downside price objective of $68.63. Second, there is support in the $63.50-$62.25 area.
Bottom line: Prices are still in a downtrend but the potential of buyers to show up again at a former support area should mean we put MMP on our watch list for a possible purchase.