Weak charts and a quantitative rating of "Sell" from TheStreet's Quant Ratings service should keep buyers of Sohu.com Ltd. (SOHU) ADRs sidelined. SOHU has been making lower lows and lower highs the past twelve months, and now has been initiated with a Sell quant rating.
Let's look at a couple of charts.
In the daily bar chart of SOHU, below, we can see a bearish picture and technical setup. Prices are below the declining 50-day moving average line and the negatively sloped 200-day line. A rally in early May failed around the 200-day line.
The On-Balance-Volume (OBV) line is weak and confirms the idea of lower prices ahead. Sellers have been more aggressive for months.
The trend-following Moving Average Convergence Divergence (MACD) oscillator shows a cover shorts buy signal in early June but it has had difficulty get to and staying above the zero line.
In this Point and Figure chart of SOHU, below, we can see a downside price target of $6 being forecast.
Bottom-line strategy: Don't put money in a stock with bearish charts and a quantitative sell rating.