Shares of Estee Lauder (EL) are lower on the heels of their earnings release Wednesday morning for their first-quarter numbers. Macro headwinds have reduced their guidance.
In our October 21 review of EL we wrote that "The charts of EL need more than a surface makeover. Continue to avoid the long side of EL."
Let's check the charts again.
In this updated bar chart of EL, below, we can see a bearish setup. Prices are in a downward trend below the negatively sloped 50-day and 200-day moving averages lines. The trading volume has been increasing in recent weeks and tells me that traders are voting with their feet.
The On-Balance-Volume (OBV) line is struggling. The Moving Average Convergence Divergence (MACD) oscillator is bearish and close to a new sell signal.
In this weekly Japanese candlestick chart of EL, below, we see a bearish picture. Prices have made a new low for the move down (not plotted). The slope of the 40-week moving average line is negative. The weekly OBV line is bearish and so is the MACD oscillator.
In this daily Point and Figure chart of EL, below, we can see a downside price target in the $169 area.
In this weekly Point and Figure chart of EL, below, a potential downside price target of $95 is shown.
Bottom line strategy: Continue to avoid the long side of EL as further declines are anticipated.
