Monster Beverage (MNST) had a big run from its 2013 lows around $45, but the chart may be undergoing a transformation of sorts.
Checking the chart above, we can see MNST has traded sideways since March. Two potentially bearish clues pop out to us. First, a year ago this stock was well above its rising 200-day moving average. Now it is testing and could break below this long-term mathematical trend-following tool.
The second chart clue comes from the On-Balance Volume line (OBV) in the lower panel. In March and April, MNST rallied to around the $140 area, and the OBV confirmed the move up. In early August, prices made new highs to around $155, but the OBV line made a lower high than the levels reached in April. A new high in price without a confirming expansion of volume is a caution flag for chartists.
If MNST breaks $130, the recent lows, we would become defensive and a close below $126 (the June low) would turn us more bearish.