• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing

Do Not Try to Catch a Falling Knife With Textron

Textron has been hit with a wave of selling recently.
By BRUCE KAMICH
Oct 18, 2018 | 01:56 PM EDT
Stocks quotes in this article: TXT

Textron Inc. (TXT) has been hit with a wave of selling recently. A lot of technical damage has been done on the charts. Where might we anticipate support or a bounce? We have not looked in on TXT since April where I wrote that, "The charts and indicators of TXT are strong and pointed higher. Traders should look to buy TXT around $64 or closer to $63 but I do not think the gap will be filled. Risking below $60 my target is the $80-$81 area." Prices did rally but stopped short of my price target. Let's check to see what has changed.

In this updated daily bar chart of TXT, below we can a fairly rapid decline from $72 down to $58. Prices broke the flat 50-day moving average line and today gapped sharply below the still rising 200-day line. The support (prior resistance) from January into April is being tested now. The On-Balance-Volume (OBV) line shows a peak back in early June and is close to a new low for the move down. The Moving Average Convergence Divergence (MACD) oscillator has quickly sunk below the zero line this month for an outright sell signal.

In this weekly bar chart of TXT, below, we do not have today's price action included but we know we are trading below the rising 40-week moving average line. The weekly OBV line shows a double top pattern and the MACD oscillator is in a bearish mode.

In this Point and Figure chart of TXT, below, we can see today's sharp move lower without a gap. The is a downside price target of $56.29 but I would not be surprised to see prices exceed late level.

Bottom line strategy: when prices drop as sharply as they have on TXT it is hard to guess where buyers might come in. Prices could get some bottom pickers in the $58-$56 area or we could see further weakness down to $54 for example. The best advice I have is to not trying to catch a falling knife.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are restricted from trading individual securities.

TAGS: Investing

More from Investing

Dare I Recommend a Retail Name Like American Eagle Outfitters?

Bruce Kamich
May 23, 2022 3:15 PM EDT

Let's check out the charts.

Look for General Motors Shares to Restart Their Uptrend

Bruce Kamich
May 23, 2022 2:10 PM EDT

Why aggressive traders could get behind the GM wheel again.

Alibaba Is Sold out on the Downside

Bruce Kamich
May 23, 2022 1:26 PM EDT

China at a bearish extreme is an opportunity.

It 'Bears' Repeating: Tune Out the Noise!

Bob Lang
May 23, 2022 1:16 PM EDT

The noise around the markets is loud, distracting and sometimes obnoxious, but if you listen to it, you'll end up making poor decisions.

I've Got Smith & Wesson in the Holster, but the Safety Switch Stays On

Jonathan Heller
May 23, 2022 12:30 PM EDT

I wouldn't jump the gun on this name, but here's why I find it compelling.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 02:24 PM EDT PAUL PRICE

    An Interesting Chart

    I'm betting heavily that stocks will be way up aga...
  • 10:10 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    "Market Timing for Dummies"
  • 01:44 PM EDT STEPHEN GUILFOYLE

    Stocks Under $10 Portfolio

    We're making a series of trades here.
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login