We reviewed the charts of Mastercard (MA) on Oct. 26 and wrote that, "Do not fight the tape. MA is heading lower with risk down to the $270 area in the weeks ahead."
Prices dipped to $280 and promptly rallied back. Prices have been unable to break the late August and early September highs to frustrate the bears. Let's dig down on the charts and indicators of MA again to see if this the time buy or whether another pullback is in the cards.
In this updated daily bar chart of MA, below, we can see that prices have stalled a number of times around $360. Rallies in late August, October, November and recently have stopped in the $360 vicinity. Maybe prices are "playing chicken" and will eventually break out to the upside, or maybe this is a distribution pattern (selling) and prices will retreat yet again.
Right now MA is above the rising 50-day moving average line and above the rising 200-day moving average line. Trading volume was heavier in late October/early November as prices skidded lower, but otherwise it has been unremarkable. The daily On-Balance-Volume (OBV) line has been neutral since early September. If buyers are accumulating shares of MA they are "under the radar." The Moving Average Convergence Divergence (MACD) oscillator has been staying close to the zero-line the past couple of months.
In this weekly bar chart of MA, below, we see a mixed picture. Prices are in an uptrend as they trade above the rising 40-week moving average line. The weekly OBV line has not shown us much in the way of aggressive buying since March. The weekly MACD oscillator is above the zero line but the two moving averages are on top of each other. We could see a buy signal or further weakness - it all depends on the next move for MA.
In this Point and Figure chart of MA, below, we can see a potential upside price target of $412 and we can see that a trade at $31.51 could weaken this chart.
Bottom line strategy: Longer-term I would expect the price of MA to be higher in 2021, but in the short-run I am neutral.
