Cerner (CERN) has broken a key support level on our charts. Is it "done for" or can it make a reversal at this point in time? It is "touch and go" so let's look at the charts and indicators.
In this 12-month daily chart of CERN, below, we can see a significant and hard decline for CERN from early August. In addition to gaping below the declining 50-day and 200-day moving averages in early November and a bearish death cross, CERN has broken key support around $50. More on this support area when we look at the weekly chart.
The volume of trading has been heavy since the gap lower. The daily On-Balance-Volume (OBV) line peaked in August and moved lower until mid-November, suggesting that sellers have been more aggressive. Interestingly, the OBV line has been flat since mid-November even as prices made a new low.
Another potential positive is a bullish divergence between the lower lows in price in November and December and the higher momentum readings. Clearly, the pace of the decline slowed dramatically.
For the longer-term weekly chart of CERN, below, we went back further in time to show why the $50 area is important. There is the low in 2016 and the lows in 2014. The next potential support area on this chart is $45 and then $40.
Currently, CERN is below the declining 40-week moving average line. The weekly OBV line has been down for several months but it is having a small "uptick." The Moving Average Convergence Divergence (MACD) oscillator is in bearish territory and not moving toward a cover shorts buy signal.
In the Point and Figure chart, below, we can see an uninterrupted decline for CERN from $66 to $48. Certainly, prices are oversold and we could see an oversold bounce in the short-run, but that is not a sufficient reason, in my opinion, to go long.
CERN could continue to slide lower or build a base at a level I would not be anticipating. In the meantime I would stand aside.