During Jim Cramer's Mad Money program Tuesday night, he mentioned that Emerson Electric Co. (EMR) declined Tuesday due to a downgrade as investors continue to flee the industrials.
In this daily bar chart of EMR, below, we can see that prices stalled in January and have weakened this month. Prices are below the flat 50-day moving average line. The 200-day line is still in a slight uptrend but that may weaken in the days ahead.
The daily On-Balance-Volume (OBV) line made a peak in early January and its subsequent decline tells us that sellers of EMR have been more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator peaked in November and is now below the zero line in sell territory.
In this weekly bar chart of EMR, below, we can see that prices recently topped out in the same area as the 2018 peak - the market has a memory or traders have a memory of the prior high and took profits there. The 40-week moving average line is still pointed up but we could see the line tested in the weeks ahead.
The weekly OBV line shows weakness so far this year, and the MACD oscillator crossed to the downside last month for a take profits sell signal.
In this Point and Figure chart of EMR, below, we can see that the software is projecting a potential downside price target in the $64 area.
Bottom line strategy: The charts of EMR were bullish last year but this year is another story. EMR looks vulnerable to further declines and a potential downside target of $64. Failure to find buying support around $64 could precipitate a deeper decline.
