Viacom, Inc. (VIA) was reviewed back in July 2016 when we said, "It looks like the rally to $65 is getting under way. Traders should buy VIA on a close above $50 and add on strength." With plenty of hindsight we can see that VIA never closed above $50 to give us our go long signal. Instead, prices have worked lower over the past 17 months but a bounce to the upside the past two months deserves some comment. Is the downtrend coming to an end or is there more disappointment ahead?
In this updated daily bar chart of VIA, below, we can see a downtrend from early April to early November. Prices have been below the declining 200-day moving average line since May.
In late November VIA rallied above the declining 50-day moving average line. The slope of the 50-day line is still bearish but the line should flatten out if prices remain firm. VIA rallied from near $28 to near $36 but volume did not increase and the On-Balance-Volume (OBV) has been flat the past six weeks suggesting that buyers and sellers of VIA have been in balance. The trend-following Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in late November for a buy signal but the lines have narrowed towards a possible bearish crossover.
In this weekly bar chart of VIA, below, we can see that prices have lost considerable ground over the past three years. VIA is below the declining 40-week moving average line. The weekly OBV line has moved sideways to lower since July. The weekly MACD oscillator may be giving us a cover shorts buy signal if it can follow through a bit more on the upside.
In this Point and Figure chart of VIA, below, we can see that prices are "curling over" and are pointed down to a possible $33.20 price target.
Bottom line: Our package of charts and indicators on VIA are not screaming "buy" and prices look like they will weaken in the weeks ahead.