Ascena Retail Group (ASNA) has been trying to hammer out a base formation this year but accumulation has been lacking. The weekly chart suggests further basing in the $8-$6 area is possible in the weeks ahead.
In this daily chart of ASNA, above, we can see that prices have spent most of the last 12 months below the declining 200-day moving average line. Prices have crisscrossed above and below the 50-day average when it has been falling and rising. The big issue for this chart is the flat On-Balance-Volume (OBV) line. The OBV line has been neutral the past four to five months and is not signaling any aggressive buying or accumulation. Though dips into the $7-$6 area have found buyers this year, the lack of increased volume on up days tells me that more sideways price movement is needed before we can expect a sustained move above the 200-day average.
In this three-year weekly chart of ASNA, above, we can see a prolonged downtrend with long stretches of time below the declining 40-week moving average line. The weekly OBV line is up from a February low but it also shows downswings in the series -- let's call it mixed. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line (bearish) and looks like it is narrowing toward a new sell signal.
Bottom line: ASNA could surprise and rally but more likely we expect to see further sideways price action and retests of the $7 level in the weeks ahead.