JD.com (JD) is down sharply Monday morning, so let's check on the charts. In our last review of JD back on March 11 we wrote that "JD was trading higher on a Q4 earnings beat, according to media reports. The $85-$80 area seems to be pretty good support but the bearish divergence from the weekly OBV line tells me to not rush to be a buyer."
In this updated daily bar chart of JD, below, we can see that our advice on not being in a rush to buy was either luck or skill.
Prices declined to a May low, which was followed by a shallow bounce. JD has been hit with selling in recent days and is close to making a new low as the potential support in May is breaking. Prices are trading below the 50-day and 200-day moving average lines. The daily On-Balance-Volume (OBV) line has been in a downtrend since November and tells us that sellers of JD have been more aggressive for several months now. The Moving Average Convergence Divergence (MACD) oscillator is slipping below the zero-line for a new sell signal.
In this weekly Japanese candlestick chart of JD, below, we do not have today's candle information but we can imagine what it might look like for the week.
Prices are trading below the declining 40-week moving average line. The chart suggests there could be buying interest (support) around $60 but it is getting old and traders may not be looking to be buyers again at that level. The weekly OBV line is in a downward trend and the MACD oscillator has narrowed but remains below the zero-line.
In this daily Point and Figure chart of JD, below, we can see a potential downside price target of $60.
In this weekly Point and Figure chart of JD, below, we can see the $60 price target again.
Bottom line strategy: China stocks are getting hit so remain on the sidelines. I am still in no rush to be a buyer.
