Paychex Inc. ( PAYX) reported its fiscal fourth-quarter results here on Wednesday morning and saw its revenue and earnings per share both rise a little more than 10% from their year-earlier levels. But instead of focusing on the short term, let's take a look at the bigger picture of this human resources and payroll firm. 
In this daily bar chart of PAYX, below, I see a large topping pattern with a neckline around $110. The slope of the 50-day moving average line has turned down and the slower-to-react 200-day line has begun to roll over. The On-Balance-Volume (OBV) line has been weak since the end of December and tells me that sellers of PAYX have been more aggressive for several months now. The Moving Average Convergence Divergence (MACD) oscillator is bearish but trying to show improvement from late May.
In this weekly Japanese candlestick chart of PAYX, below, we can see an unorthodox double top pattern after a major rally. Prices have broken down below the cresting 40-week moving average line. The latest candle shows an upper shadow at the underside of the average line, indicating that traders rejected those levels. The weekly OBV line has been rolling over the past 12 months. The MACD oscillator made a lower high in April when prices made a higher high for a bearish divergence.
In this daily Point and Figure chart of PAYX, below, we can see a potential downside price target in the $94 area.
In this second Point and Figure chart of PAYX, below, we see the same $94 downside price target as on the daily chart above.
Bottom line strategy: The charts and indicators of Paychex are not favorable and further longer-term declines are expected. Avoid the long side of PAYX.
