Hasbro (HAS) was trading down around 8% in pre-market activity as traders and investors react to their disappointing quarterly numbers as the Toys R Us liquidation hurt their Christmas sales.
Let's see what this weakness could do to the charts and indicators.
In this daily bar chart of HAS, below, we can see the price action through Thursday's close. When trading opens on the NYSE we are likely to see HAS back below the declining 50-day moving average line. The rally from the late December low stopped short of the slightly rising 200-day moving average line.
The trading volume saw a small bump up in early January when HAS retested the December low but it did not expand on the rally. A price rally on slack volume is not a strong rally.
The daily On-Balance-Volume (OBV) line did creep higher the past month but not at a vigorous pace.
The Moving Average Convergence Divergence (MACD) oscillator moved above the zero line for a buy signal last month but is has since narrowed towards a take profits sell signal.
In this weekly bar chart of HAS, below, we can see the price action over the past three years. Prices have been weakening the past two years and HAS is below the flat 40-week moving average line.
The weekly OBV line peaked in September and January's improvement may be temporary.
The weekly MACD oscillator has nearly crossed to the upside for a cover shorts buy signal but if today's anticipated price weakness continues we could see this signal postponed.
In this Point and Figure chart of HAS, below, we can see that prices reached an upside price target of $90.65, so a reaction should not be a total surprise.
Bottom line strategy: HAS is due to open lower on a day when the "tape" looks weak. A decline into the $85-$80 area seems likely and I would not rule out a retest of the December/January lows. Look for bullish opportunities elsewhere.
