Trying to Make Sense of Unilever

 | Oct 12, 2017 | 10:08 AM EDT
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We reviewed the stock charts of Unilever N.V. UN last week, and said, "UN has made a couple shallow corrections in its path higher. My "gut feel" is that the next correction, whenever it comes, will not be shallow."

One week on and UN has not slumped but actually edged a little higher. Let's check the charts and indicators again to see if we need to adjust our gut feel.

In this updated daily bar chart of UN, below, we can see that the 50-day moving average line has turned slightly lower. The 200-day moving average line is still rising and well below the market. The daily On-Balance-Volume (OBV) line has been flat recently as volume is subdued and neither buyers nor sellers are being aggressive. The Moving Average Convergence Divergence (MACD) oscillator is "hugging" the zero line.

In this weekly bar chart of UN, below, we can see that prices are still extended on the upside and still well above the rising 40-week moving average line. The weekly OBV line is still neutral and the MACD oscillator on this time frame is still in a bearish configuration.

In this Point and Figure chart of UN, below, we see both an extended rally and an upside price target of $72.50.

Bottom line: UN may have corrected its extended rally over the past three weeks. It is possible, but I have my doubts. Chart-reading is part science and part art so you never know everything and you can always be surprised.

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