In the "Lightning Round" segment of Mad Money Thursday night, one caller asked Jim Cramer about cosmetics maker Revlon (REV) . Cramer was bearish but let's check the charts.
In this daily bar chart of REV, below, we can see that prices have been weak the past 12 months. The March lows were broken by July suggesting that the stock's problems have not been totally Covid related.
Prices are well below the declining 50-day moving average line and the slower-to-react 200-day moving average line. Trading volume has been heavy since June giving me a sense that investors are liquidating positions.
The On-Balance-Volume (OBV) line has been in a decline which tells us that sellers are more aggressive.
The 12-day price momentum study is showing higher lows since July telling us that the pace of the decline is slowing, but I don't get the feeling that this bullish divergence will result in much of a rebound.
In this weekly bar chart of REV, below, we can see that the stock has been in trouble for a long time. All the indicators are bearish and further declines should be anticipated.
In this daily Point and Figure chart of REV, below, we can see the decline and a potential downside price objective of $0.00 - zero. I have no idea if REV could go Chapter XI or Chapter VII but the chart is definitely bearish.
Bottom line strategy: The lows of late 2008 and early 2009 were dramatic white-knuckle affairs. REV is looking like it will revisit those lows. I would not anticipate a Cinderella ending. Avoid the long side of REV.
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