Alternative investment management company Blackstone Inc. BX jumped Thursday after announcing Q4 earnings that beat analysts' expectations. A Real Money subscriber was impressed with the numbers the past two quarters and the strong growth of assets under management, and asked me for a technical update on the stock.
Let's check out the charts and indicators again.
We reviewed BX on October 21 and wrote that "Traders should continue to hold longs recommended in August. Use a stop at $109. Additional purchases of BX could be made today. The $167 area is our new price target. We see $465 possible longer-term."
In this updated daily bar chart of BX, below, we can see that prices continued to gain after our October review but then stopped at the end of November. BX broke below the 50-day moving average line in December and recently below the slower-to-react 200-day line. Prices popped higher Thursday but it remains to be seen how far and how long they can travel upward.
The daily On-Balance-Volume (OBV) line shows a decline from early December as traders became more aggressive sellers with heavier trading volume on days when BX closed lower.
The Moving Average Convergence Divergence (MACD) oscillator fell below the zero line in December for a sell signal. A cover shorts buy signal now may only give us a temporary bounce.
In this weekly Japanese candlestick chart of BX, below, we can see that prices made an impressive advance from their 2020 low. Prices have broken below the rising 40-week moving average line but the two most recent candle patterns are a bullish engulfing pattern. Confirmation is needed to give us confidence that a low or bottom reversal has been made. The jury is out.
The OBV line and the MACD oscillator are still pointed down.
In this daily Point and Figure chart of BX, below, we can see that prices reached a downside price target of $111.
In this weekly Point and Figure chart of BX, below, we can see that the software is projecting the $87 area as a possible target.
Bottom line strategy: I would be flat BX as prices breached the $109 sell stop. In the short-run prices could rebound further but the "risk off" atmosphere in the marketplace is likely to dominate and provide strong headwinds for a sustained move up. Avoid the long side.
