A caller during the 'Lightning Round' of Jim Cramer's Mad Money program Tuesday night asked about The Brink's Co. (BCO) . Cramer replied:"I think this is a good solutions company and I would buy it here."
Let's take a quick look at the charts and indicators to see if they are in agreement.
In this daily bar chart of BCO, below, we can see some interesting technical developments. Prices declined from July to a low in late December followed by a rally to a late April two-day reversal.Prices then made a sharp move higher to a new high close, but the next day prices slumped and closed weak - thus a two-day reversal.
This month prices have struggled to stay above the flat 50-day moving average line. The 200-day moving average line has a negative slope.
The daily On-Balance-Volume (OBV) line shows a bullish rise from October, but recently the line has turned flat.
The Moving Average Convergence Divergence (MACD) shows a weakening pattern from February to May, and is now crossing the zero line for an outright sell signal.
In this weekly bar chart of BCO, below, we can see the activity of the past three years. BCO made a very impressive parabolic-like rally in 2016 and 2017, but prices have trended sideways to lower since that zenith. The slope of the 40-week moving average line has been bearish for the past 12 months.
The weekly OBV line shows a peak in June 2018 and weakness to date. A declining OBV line signals more aggressive selling.
The MACD oscillator has narrowed in recent weeks and could soon cross to a take profits sell signal.
In this point and figure chart of BCO, below, we can see a relatively small downside price target of $71.49 or a 10% decline from current levels.
Shallow pullbacks are generally buying opportunities unless a key support level is broken. Key support on BCO's weekly chart is the $60 area.
Bottom line strategy: BCO could dip to around $72 or so, and that may be a buying opportunity. Watch the price action before pulling the trigger.