Upscale home furnishings and design center RH ( RH) has been sinking on the charts in recent weeks. In my July 10 review of RH the charts were in a bullish setup and I wrote, "Aggressive traders could go long RH at current levels but they need to be able to risk to $325. Add to longs on a close above $352." RH rallied to around $405 by early August but reversed quickly to the downside. Nimble traders may have taken profits above $387 and others should have been stopped out on the decline. 
What do the charts of RH look like now?
In this daily bar chart of RH, below, I can see that prices gapped below the cresting 50-day moving average line and are just a few dollars above the rising 200-day moving average line. Trading volume has surged recently as traders vote with their feet. The math-driven On-Balance-Volume (OBV) line shows weakness from early August, telling me that traders have been more aggressive sellers for several weeks now. The Moving Average Convergence Divergence (MACD) oscillator has been weakening since July and is now below the zero line in sell territory.
In this weekly Japanese candlestick chart of RH, below, I see a bearish setup. Prices made a top reversal pattern in July and a large bearish engulfing pattern in late August and early September. Prices are poised to test and probably break the 40-week moving average line. The weekly OBV line has turned lower and the MACD oscillator is ready to cross to the downside.
In this daily Point and Figure chart of RH, below, I can see a potential downside price target in the $227 area.
In this weekly Point and Figure chart of RH, below, I can see the same downside price target of $227 as shown on the daily chart above.
Bottom line strategy: The charts of RH look weak and prices are likely headed lower in the weeks ahead. Avoid the long side of RH.
