PNC Financial (PNC) was rated a new "reduce" by a sell-side firm Thursday with a $110 price target. Unfortunately the charts and indicators suggest a deeper decline is possible in the months ahead.
Let's take a look at what's happening.
In the daily bar chart of PNC, below, I can see that the shares have trended lower the past 12 months. PNC trades below the declining 50-day moving average line and below the bearish 200-day moving average line.
The trading volume shows heavy activity in March, April and early May as prices skidded lower into a low in May. Sometimes heavy volume at a low is a signal that shares have moved from weak hands to stronger hands but I am not so sure that is the case with PNC.
The On-Balance-Volume (OBV) line looks like it bottomed in March and May and turned higher into late July. Unfortunately the OBV line has been weak since the beginning of August and prices are not far above the May nadir. The Moving Average Convergence Divergence (MACD) oscillator is bearish.
In the weekly Japanese candlestick chart of PNC, below, I can see the past four years of price action and it is not positive. The shares trade below the declining 40-week moving average line telling me the longer-term trend is down.
The weekly OBV line shows a longer-term decline suggesting major liquidation. The MACD oscillator has been bearish since early 2022. The weekly candles have yet to show us lower shadows or a bottom reversal pattern.
In this daily Point and Figure chart of PNC, below, I can see a potential downside price target in the $98 area.
In this weekly Point and Figure chart of PNC, below, I used a five-box reversal filter. Here the X's and O's give us a price target in the $73 area.
Bottom-line strategy: In full disclosure I am a customer of PNC and have been for a number of years. I find the service in local branches great but that does not necessarily translate into a strong stock price unfortunately. Traders should avoid the long side of PNC as further declines are likely in the weeks and months ahead.
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