Ameriprise Financial (AMP) ."I've always liked that company. I'm a buyer." That's what Jim Cramer had to say to one caller during the fast paced Lightning Round of his Mad Money program on CNBC Tuesday night.
I wondered if AMP would look stronger or weaker than other financials so I turned to the charts today.
In this daily bar chart of AMP, below, we can see that prices declined sharply in the fourth quarter of 2018. AMP has rebounded this year but it has been unable to break above the bearish 200-day moving average line. The shorter 50-day moving average line is pointed up but that just means that the shorter-term trend is bullish.
The level of trading volume looks like it has slowed from late December which is not the typical picture of expanding volume that technical analysts like to see in a rally.
The On-Balance-Volume (OBV) line shows a rise from late December to the middle of February but is has been weakening which signals that sellers of AMP have become more aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside generating a take profits sell signal.
In this weekly bar chart of AMP, below, we can see that prices have been in a decline since late 2017 and not just the fourth quarter of 2018. AMP is struggling at the underside of the declining 40-week moving average line.
The weekly OBV line shows a three-year rise but it is hard to understand when compared to the price act.
The weekly MACD oscillator has crossed to a weekly cover shorts buy signal and it could be a while before it crosses the zero line for an outright buy message.
In this Point and Figure chart of AMP, below, we can see an upside price target of $151 for AMP but a decline to $124.93 would weaken the chart, in my opinion.
Bottom line strategy: AMP may well be a well run institution but a rally on diminishing volume and a bearish moving average suggest that AMP is more likely to retrace some of the gains since December.