We have not looked at the charts of United Continental (UAL) in a while, but our forecast played out well in the end: "In this age of social media, it is an open question if people vote with their feet in reaction to UAL's current controversy, but regardless of how this plays out, it looks like UAL is vulnerable and could retest the $65 level with the possibility of a deeper decline toward $60."
With some hindsight, we can see prices rallied to an early June peak and have been under pressure the past five months and eventually reached our $60 price target in September. Prices look like they are trying to hold the $58 level, but with the price of crude oil rallying and discretionary spending a fickle item, we can have doubts about a rally.
Let's review the latest charts before filing a flight plan.
In this daily bar chart of UAL, above, we can see the downtrend from early June to the middle of September. Prices have been trying to hold the $58 level or area and I am not completely convinced they will succeed. Prices are below the 50-day day moving average line as well as the declining 200-day average line. The daily On-Balance-Volume (OBV) line has edged up from its mid-September low but does not look all that impressive. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line, but the two averages are moving closer together and may cross to the upside in the days and weeks ahead.
In this weekly bar chart of UAL, above, we can see prices are below the declining 40-week moving average line. The weekly OBV line has been weakening since late May, while the MACD oscillator might generate a cover-shorts buy signal in the weeks ahead.
In this Point and Figure chart of UAL, above, we can see the $58.06-$57.49 area has stopped the decline for now. A decline to $56.92 could open the way to deeper declines, while a rally to $61.64 will turn the chart more constructive.
Bottom line: The charts of UAL could either bounce or rally or slip lower. The price action and indicators are not easy to read, but weakness below $56.92 should be sold and strength above $61.64 could be bought.