Shares of Emerson Electric ( EMR) , which makes things such as motors and alternators, were raised to an overweight (buy) rating by the fundamental analysts at Morgan Stanley Tuesday. Emerson is working on buying National Instruments ( NATI) .
Let's check out the charts and indicators on Emerson.
In the daily bar chart of EMR, below, I see that share prices have declined the past three months. Prices trade below the declining 50-day moving average line and below the negatively sloped 200-day moving average line. The trading volume has been more active the past five months suggesting more investor interest.
The daily On-Balance-Volume (OBV) line shows a declining pattern the past 12 months. The Moving Average Convergence Divergence (MACD) oscillator is bearish and not close to a buy signal.
In the weekly Japanese candlestick chart of EMR, below, I see a weak-looking picture. The shares are in a downward path and trade below the negatively sloped 40-week moving average line.
The OBV line has been weak the past three months telling me that sellers of EMR are being more aggressive than buyers. The MACD oscillator has fallen back below the zero line for an outright sell signal.
In this daily Point and Figure chart of EMR, below, I can see a downside price target in the $74 area.
In this second Point and Figure chart of EMR, below, I used weekly price data. Here the software projects a potential downside price target in the $70 area.
Bottom-line strategy: Fundamental analysts can be comfortable recommending stocks in downtrends but technical analysts are not.
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