The charts of Prudential Financial Inc. (PRU) show weakness over the past nine to 10 months but as investors we want to be forward looking. What do the charts suggest for the weeks and months ahead? Let's check for clues on this stock discussed by Jim Cramer Monday night on Mad Money.
In the daily bar chart of PRU, below, we can see that prices have lost ground from January's zenith. Prices made new lows in October as the broad market slumped. A November rebound stopped at the underside of the declining 200-day moving average line. The slope of the 50-day average line is also bearish.
One positive is the On-Balance-Volume (OBV) line, which shows a rise from late June into early November suggesting that buyers of PRU were more aggressive even as prices declined. The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed to the upside in early November for a cover shorts buy signal.
In the weekly bar chart of PRU, below, we see that prices are below the declining 40-week moving average line. The price pattern from late 2016 looks like a top.
The weekly OBV line shows a peak from early 2018 and does not pick up the rise on the daily OBV line. The weekly MACD oscillator looks like it is turning down again to a fresh sell signal.
In this Point and Figure chart of PRU, below, we can see a downside price target of $84.39 being projected.
Bottom-line strategy: The movement of the daily OBV line from July suggests some bottoming action while the weekly chart suggests further declines. With a bearish price target on the Point and Figure chart I think traders should stand aside and wait for some clarity.