Ralph Lauren Corp. (RL) has weakened recently but back in early November I recommended that "Traders could go long RL on strength above $140 and add above $145. Risk below $125 for now." As it turned out the strength in RL stopped short of $140 and prices traded lower to break the cresting 200-day moving average line. Prices are back down to a $115-$105 support zone but will that hold? Let's check out the latest charts and indicators.
In this daily bar chart of RL, below, we can see that while prices are back to the former area of resistance from January through early June we have yet to see signs of accumulation. The 50-day moving average line is pointed down and is close to crossing below the rising/cresting 200-day line for a bearish dead or death cross. The daily On-Balance-Volume (OBV) line is weak and indicates that sellers of RL have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line for now.
In this weekly bar chart of RL, below, we can see that prices are below the cresting 40-week moving average line. The weekly OBV line diverged from the price action from June and is now pointed down. The weekly MACD oscillator is almost below the zero line for an outright sell signal on this longer time frame.
In this Point and Figure chart of RL, below, we can see a downside price target of $105.52. This doesn't sound that bearish but it would pretty much break the support area if it should occur.
Bottom line strategy: a month ago RL looked poised to break out on the topside and now the downside looks like the path of least resistance.