Unit Corp. (UNT) has a combination of weak charts and indicators and it was just downgraded to sell by TheStreet's Quant Ratings service -- the technical version of "three strikes." Let's check out the details.
In the daily bar chart of UNT, below, we can see that prices broke below their December nadir making new lows for the move down for most of this month. UNT is below its declining 50-day moving average line and the slower-to-react 200-day moving average line has had a bearish slope since November.
The daily On-Balance-Volume (OBV) line has been in a downtrend from December telling us that sellers of UNT have been more aggressive.
In the lower panel is the 12-day price momentum study and price momentum has not slowed in this decline and we do not yet see a bullish divergence to even suggest a rally.
In the weekly bar chart of UNT, below, we can see that prices are testing some old support around $12-$10. Prices are below the declining 40-week moving average line.
The weekly OBV line is bearish and so is the Moving Average Convergence Divergence (MACD) oscillator.
In this weekly Point and Figure chart of UNT, below, we have a downside price target in the $6 area.
Bottom-line strategy: Sorry, but I cannot see any reason to approach UNT from the long side.
