Martin Marietta Materials (MLM) has rolled over since early 2017 and has broken below key support around $190. Prices could bounce in the near-term but the risk remains for a deeper and long correction. Buyers beware.
In this daily bar chart of MLM, below, we can see a very bearish set-up with respect to our favorite indicators. Prices have been making lower lows and lower highs since late January. Prices are below the declining 50-day moving average line and also the bearish 200-day line. In late August we can see a bearish dead cross of the 50-day and the 200-day averages.
The daily On-Balance-Volume (OBV) line shows two declining phases in the past 12 months. Recently the OBV line started to decline from late July and tells us that sellers of MLM have been more aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator moved below the zero line in late July for an outright sell signal which is still in effect.
In this weekly bar chart of MLM, below, we can see that prices are below the declining 40-week moving average line telling us that the longer-term trend is down.
The weekly OBV line shows a peak in the middle of 2016 and has been moving irregularly lower until now - this is a long-term pattern of liquidation and selling.
In this Point and Figure chart of MLM, below, we can see that a downside price target of $161 is shown and not far away. With no visible nearby support we are likely to see further losses in the price of MLM.
Bottom line strategy: MLM might bounce in the short-term but further longer-term declines are possible in the months ahead. After $161 the next longer-term price target could become $120. Buyers should keep their powder dry.