"This is a manufacturing company and it can go lower before it finds a bottom." That is what Jim Cramer had to say about Barnes Group (B) during the Lightning Round of Mad Money Wednesday night. The downtrend in prices is easy to see over the past twelve months but let's look at our standard collection of charts and indicators to see what might be ahead into the fall.
In the daily bar chart of B, below, we can see that prices were finding support in the $52-$49 area this calendar year and recently price broke below the zone. This area should now reverse roles and act as resistance. B is below the declining 50-day and 200-day moving averages.
The daily On-Balance-Volume (OBV) line has been in a downtrend the past twelve months, which tells us that sellers of B have been more aggressive the past year. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line in bearish territory. Not a positive picture.
In the weekly bar chart of B, below, we can see another bearish combination of indicators. Prices are below the declining 40-week moving average line. B failed at the underside of the 40-week line several times.
The weekly OBV line peaked last September and its decline also tells us that seller have been more aggressive. The MACD oscillator has been bearish since November.
In this weekly Point and Figure chart of B, below, we can see a possible downward price target of $33.50.
Bottom-line strategy: The price of B is getting oversold, which might generate a short-covering bounce to sell. In the weeks ahead we probably see the upside capped by $52 and the downside bounded by $33.