Mallinckrodt plc (MNK) gapped lower today. Is there any hope for this stock or is there a bottom in sight? Let's examine a couple of charts.
In this daily bar chart of MNK, below, we can see a lot of bearish signals. Prices have been in a downtrend since August on this chart. Prices are below the declining 50-day and 200-day averages.
The daily On-Balance-Volume (OBV) line has been declining along with price since August, telling us that sellers of MNK have been more aggressive with heavier volume being transacted on days when the stock has closed lower.
In the bottom panel we fail to find a bullish divergence from the momentum study so no early warning of a low.
In this weekly close only Point and Figure chart of MNK, below, we can see how weak the price action is and there is a downside price target of zero. Not pretty.
Bottom line strategy: MNK is circling the drain. Don't go down with it.