PPL Corp. (PPL) was favored by Jim Cramer Monday in his Real Money column as a utility that could be a safe haven during this current market decline. Let's check out the charts and indicators to see if we should buy PPL now or at a later point in time.
In the daily bar chart of PPL, below, we can see that prices have been in a downtrend from the middle of March. Last week prices broke the May lows and the daily On-Balance-Volume (OBV) line made a new low for the move down telling us that sellers of PPL have been more aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed below the zero line is early July for an outright sell signal which is still in effect. The 50-day moving average line has a negative slope and the 200-day moving average line is cresting.
In the weekly bar chart of PPL, below, we can see that prices are below the 40-week moving average line, which is "rolling over." Trading volume has been declining this year and the OBV line is neutral to bearish.
The MACD oscillator is slowly breaking the zero line for a sell signal.
In this Point and Figure chart of PPL, below, we can see a potential downside price target of $28.
Bottom-line strategy: Fundamentally PPL may be a fine company to invest in but the charts suggest we should defer purchases for now. Prices are pointed down and I want to see technical evidence that prices have turned to the upside.