Careful, the Rally in XPO Logistics Has Stalled

Let's check out the charts.

The Lightning Round segment of Mad Money is very popular with viewers. This is when lucky callers get to quiz host Jim Cramer about stocks that they are interested in. One caller Monday evening asked about XPO Logistics (XPO) . "You want to buy this one. The last quarter was terrific," responded Cramer. 

Let's check out the charts. 

In the daily bar chart of XPO, below, we can see that the shares have been trading sideways for nearly three months now. The shares are trading below the cresting 50-day moving average line. The slower-to-react 200-day moving average line shows a positive slope and intersects down around $95.

The On-Balance-Volume (OBV) line bottomed in March and made a nice advance but like the price action the OBV line has moved sideways the past three months. The Moving Average Convergence Divergence (MACD) oscillator has been hugging the zero line recently telling us there is little in the way of trend strength.  

 

 

In the weekly bar chart of XPO, below, we can see that the price action and the indicators have shifted to a neutral direction. The shares are still trading above the rising 40-week moving average line but the trading volume is light and the OBV line has been stalled the past three months.

 

The MACD oscillator has crossed to the downside for a take profits sell signal. 

 

 

In this daily Point and Figure chart of XPO, below, we can see a potential upside price target of $147 but we can also see that a trade at $114.23 could start to weaken the picture.  

 

 

Bottom-line strategy: Broader market weakness could spill over to XPO. Longs should raise stop protection to at least $111. If a correction starts I want to get out early.

 

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