Emerson Electric (EMR) sold off from October to December breaking below key support around $66. Prices have bounced the past few weeks and now the $66 area represents an overhang of chart resistance. Let's check our charts and indicators to see if EMR can overcome a potential zone of selling interest.
In this daily bar chart of EMR, below, we can see a mixed picture. Prices are testing the declining 50-day moving average line. Prices may not be able to push above the 50-day line because trading volume has declined this month and the daily On-Balance-Volume (OBV) line has stalled after an initial rise from a December low. The Moving Average Convergence Divergence (MACD) oscillator crossed to the upside in late December for a cover shorts buy signal and it is right at the zero line now. If EMR stalls at the 50-day line we may also see the MACD oscillator fail to push above the zero line.
In this weekly bar chart of EMR, below, we can see that prices are below the flattening 40-week moving average line. The weekly OBV line is just below its September-November highs and it may not break out to a new high if it takes its cue from the daily OBV line. The weekly MACD oscillator is in bear territory below the zero line but has started to narrow towards a possible crossover.
In this Point and Figure chart of EMR, below, we can see that prices met a downside price target but an upside target is not being projected by the software. The volume at price bars on the left side of the chart indicate significant resistance is possible from $65 to $73.
Bottom line strategy: the charts of EMR are mixed at best. Prices could move higher from here as technical analysis is not 100% perfect but I would be surprised at this point in time and I would expect price gains to be dampened by overhead resistance. Better trading opportunities are probably going to be found elsewhere.
Jim Cramer discussed EMR on his latest Action Alerts PLUS conference call. Click here to access the call and learn more about AAP.