Walgreens Boots Alliance (WBA) is trading lower here on Tuesday in pre-market activity on the heels of the drugstore giant cutting its profit forecast for the year. Let's check out Walgreens' charts and indicators to see what may lay ahead.
In this daily bar chart of WBA, below, I can imagine prices trading lower and retesting their 52-week low of $29.48. Prices trade below the declining 50-day moving average line and below the declining 200-day line. The On-Balance-Volume (OBV) line shows on-and-off weakness since August and does not suggest that we have seen scale-down buying. The daily Moving Average Convergence Divergence (MACD) oscillator is turning lower from the underside of the zero line.
In this weekly Japanese candlestick chart of WBA, below, I can see a mixed picture. Prices are in a downtrend and trade below the negatively sloped 40-week moving average line. The weekly OBV line has been weak but made a low in May. The MACD oscillator is below the zero line but made a higher low in May versus October. This is a potential bullish divergence.
In this daily Point and Figure chart of WBA, below, I can see a downside price target in the $24 area.
In this weekly Point and Figure chart of WBA, below, I can see an upside price target in the $38 area, but a weekly trade at $29.22 or lower could generate a downside price target.
Bottom line strategy: WBA is at a crossroad. Prices are pointed down and easily could make a new 52-week low, but some of the indicators may not confirm the weakness. Bullish divergences could be the start of a bottoming process. Let's stand aside and see how this plays out.
