Jack Henry & Associates (JKHY) is a financial technology company and payment processing service for the financial services industry. Its stock price has soared higher for decades but a major change in direction appears to be underway. Let's examine some charts and indicators.
In this daily bar chart of JKHY, below, I can see that prices have weakened the past year. Prices trade below the declining 50-day moving average line and below the bearish 200-day moving average line. The trading volume has been more active since the middle of March when prices made a low.
The On-Balance-Volume (OBV) line has been moving lower from the middle of July and tells me that sellers of JKHY are being more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line in bearish territory. The MACD oscillator has been below the zero line for much of the past year.
In this weekly Japanese candlestick chart of JKHY, below, I see a three-year top pattern with a neckline along the $145 area. The weekly trading volume has been fairly level the past three years but it has increased on the "right shoulder" the past several months.
The weekly OBV line has been weak since last June. The MACD oscillator is bearish and has turned lower from the underside of the zero line.
In this monthly candlestick chart of JKHY, below, I can see the price history going back to 1986. A very impressive advance but also a major top formation the past four years or so.
In this daily Point and Figure chart of JKHY, below, I can see a potential downside price target in the $128 area.
Bottom line strategy: When I took a course in technical analysis at the NY Institute of Finance taught by Alan Shaw way back in 1976, I learned one of his catch phrases - the "bigger the top the bigger the drop". JKHY has made a large top formation after a historic rise. A major decline lies ahead.
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