AstraZeneca PLC (AZN) is getting plenty of media attention as Britain began rolling out the coronavirus vaccine developed by AZN and the University of Oxford. The stock has been sliding lower since it made a sharp run up into July. Let's check out the charts and indicators to see if this pullback is in its last stages.
(For more on AZN, see Jim Cramer: Here's My Plan to Distribute the Vaccine)
In this daily bar chart of AZN, below, we can see a pattern of lower lows and lower highs - the simple definition of a downtrend. Prices are trading below the bearish 50-day moving average line. It is bearish because its slope is negative.
AZN is also trading below the still rising 200-day moving average line. The 50-day line is also slipping below the 200-day line for a bearish dead or death cross. Obviously this signal is late to the game. Trading volume was heavy back in July at the price peak and also in the past month.
The On-Balance-Volume (OBV) line turned sharply lower in July as sellers turned very aggressive but the movement in the OBV line in December is perhaps bullish with a number of sharp upswings.
The Moving Average Convergence Divergence (MACD) oscillator is ready to cross to the upside from below the zero line. This will be a cover shorts buy signal.
In this weekly bar chart of AZN, below, we can see a bearish picture. Prices are trading below the still rising 40-week moving average line. The underside of the 40-week line could become resistance on a bounce.
The weekly OBV line shows a peak back in May and is still declining. The MACD oscillator is now crossing the zero line for an outright sell signal.
In this daily Point and Figure chart of AZN, below, we can see that the software is projecting a downside price target around $43. The software "sees" the X's and O's since May (look for the "5" on the chart) as distribution or selling. A rally to $55 or $56 is probably needed to turn the chart more positive.
Bottom line strategy: AZN has been correcting lower for several months and we still have a potential downside price target of $43, but aggressive traders might want to look past any near-term price weakness and consider a small long position risking to $47.
