Freight forwarder C.H. Robinson Worldwide (CHRW) is reportedly laying off hundreds of employees. In past market cycles, cutting headcount was cheered by some analysts, as it meant a company was getting lean and mean. Today, I believe that the sacking of people is a sign of sinking demand and a knee-jerk reaction that may not end well.
Let's check out the charts and indicators.
In this daily bar chart of CHRW, below, we can see that prices have decreased sharply in the last two months or more. CHRW is trading below the declining 50-day moving average line and below the declining 200-day line. A bearish dead or death cross is visible at the beginning of the month. The On-Balance-Volume (OBV) line shows weakness from August. The Moving average Convergence Divergence (MACD) oscillator is still bearish.
In this weekly Japanese candlestick chart of CHRW, below, we see a weak picture. Prices are trading below the declining 40-week moving average line. The weekly OBV line is pointed lower. The MACD oscillator is bearish.
In this daily Point and Figure chart of CHRW, below, we can see a price target of $75.
In this weekly Point and Figure chart of CHRW, below, we can see weakness to the $82 area being projected.
Bottom line strategy: Shares of CHRW may get a temporary lift from the giddy rally in the broad market averages Thursday but the longer-term trends and indicators suggest further declines in the months ahead.
