Adobe Systems (ADBE) will on Tuesday report earnings. During his "Mad Money" program Friday night, Jim Cramer said even if Adobe reports great earnings, investors might not care as they rotate away from the cloud stocks and into other sectors. Let's see if the charts and indicators of ADBE reveal anything.
In this daily bar chart of ADBE, below, we can see that prices have been stalled since early May. ADBE has traded around the cresting 50-day moving average line. The 200-day average line still has a positive slope and was tested at the beginning of June. The daily On-Balance-Volume (OBV) line shows a rise for much of the past twelve months signaling more aggressive buying the past year. The Moving Average Convergence Divergence (MACD) oscillator has been above the zero line for much of the past year and looks like it will now turn up to a fresh outright go-long signal.
In this weekly bar chart of ADBE, below, we can see a mixed picture. Prices made a slight new high in April, but there are divergences. ADBE is above the cresting 40-week moving average line after a recent test. The weekly OBV line is making a double top, while prices made a higher high -- a bearish divergence. The weekly MACD oscillator is crossing to the downside at a lower point than last June -- another bearish divergence when compared to the price action.
In this Point and Figure chart of ADBE, below, we can see a possible downside price target of $232. A rally to $293.97 is needed to turn the chart bullish.
Bottom line strategy: there are a number of bearish signals or divergences on the charts of ADBE to keep us sidelined from being a buyer.