Chiradeep BasuMallick in an article on TheStreet lays out his case that Ford Motor (F) and CenturyLink (CTL) face fundamental challenges to their abilities to grow sales and profits and that their dividend payouts may be in jeopardy.
My background as a technical analyst doesn't lend itself well to understanding whether these companies will maintain their payouts, but if investors who do understand this and then decide to sell their shares this will show up in the price action.
In this 12-month daily chart of F, above, I see a one-year downtrend that has begun to accelerate to the downside since the end of July. F is retesting the lows seen in February and I do not anticipate that these lows will hold. F is trading below its declining 50-day and 200-day moving averages.
The daily On-Balance-Volume (OBV) line just made a new low for the recent move down, which suggests that sellers of F have been more aggressive with heavier volume traded on days when the automaker has closed lower.
This weekly chart of F, above, is not encouraging at all. F has been in a multi-year decline below the declining 40-week moving average line. The weekly OBV line is in a downtrend and the MACD oscillator has been in a sell mode since early 2015.
I don't know what will happen with the dividend, but I expect the price of F to head still lower.
This daily chart of CTL, above, shows some wild price swings but the quick takeaway is that CTL is poised to retest its January lows. CTL is below the declining 50-day moving average. The OBV line went down sharply to confirm the price decline and momentum is not diverging from the price action.
In this weekly chart of CTL, above, we can see that prices have mostly been on the defensive the past three years. Prices are below the declining 40-week moving average line. The movement in the OBV line has been up and down with prices.
The MACD oscillator in the lower panel is in a sell mode below the zero line. It won't surprise me if CTL breaks below $22 and makes new lows for the year.
