Last night during Jim Cramer's Mad Money program he talked about earnings. While this earnings season has been great for some companies it hasn't been great for everyone. For example, a name like Kellogg Co. (K) fell substantially. Let's check out the charts.
In this daily bar chart of K, below, we can see that prices have been in a slide from September. There have been some bounces along the way, including one in January, but after each bounce prices have sunk to a lower low. K just failed at the declining 50-day moving average line. The slower-to-react 200-day moving average line is bearish.
The daily On-Balance-Volume (OBV) line peaked in September/October and declined in November and December and recovered in January. The volume surge and lower close yesterday looks like it has turned the OBV line down again. The Moving Average Convergence Divergence (MACD) oscillator is crossing to the downside from the underside of the zero line. This will be another outright sell signal.
In this weekly bar chart, below, we can see that a downtrend is not new to the share price of K. Prices are below the declining 40-week moving average line. The weekly OBV line shows a long decline and the MACD oscillator is bearish.
In this Point and Figure chart, below, we can see that the $55.25 level has stopped declines in K before but now the program projects a downside price target of $51.67 -- a new low.
Bottom-line strategy: Stay defensive, the offense is still in the locker room.