Earlier this year Arconic separated into two standalone companies - Arconic (ARNC) and Howmet Aerospace (HWM) . Let's check out the charts of ARNC.
In this daily bar chart of ARNC, below, we can see a less than robust picture. Prices have been in an uptrend since May and are trading above the rising 50-day moving average line.
Trading volume has been shrinking since April and the On-Balance-Volume (OBV) line has been neutral since August and trending sideways while ARNC has continued higher. This is a bearish divergence and can foreshadow a pullback or correction as volume has not expanded on the rally.
The Moving Average Convergence Divergence (MACD) oscillator crossed to the downside in November and has diverged from the price action this month. Another technical reason to be cautious.
In this daily Point and Figure chart of ARNC, below, we can see a potential downside price target in the $26-$25 area.
Bottom line strategy: If you are long ARNC from lower levels I would recommend taking some profits here. The downside price target from the Point and Figure chart does not look terrible but it will mean the 50-day average will be broken and that might be enough to precipitate further losses.
