The beleaguered PG&E Corp. (PCG) is likely to sink still lower in the days, weeks and months ahead. The stock price has plunged in the past two years and we have to look back to 2001-02 to see when prices were this low. This kind of decline tells you there are serious fundamental problems.
In this daily bar chart of PCG, below, we can see that downside price gaps are fairly common. Investors and traders have been running to the exists. Prices had a recovery rally from January to June but they have quickly given back those gains.
PCG is trading below the declining 50-day moving average line and the bearish 200-day line. In June and July the rally stopped at the underside of the bearish 200-day line reminding us that traders do pay attention to technical indicators.
The On-Balance-Volume (OBV) line only improved into May and has been weak since then telling us that sellers of PCG have been more aggressive.
The 12-day price momentum study shows a lessening of downside momentum from August to October despite prices making lower price lows. This is a small bullish divergence and it will probably not spark a rally or a reversal.
In this weekly bar chart of PCG, below, we can see that prices have been weak since the middle of 2017. This massive decline in price tells me that this company has serious problems that not going to get fixed anytime soon. (The fundamental story is not hard to understand but I leave that to others.)
Prices are below the declining 40-week moving average line and the OBV line is bearish. The 12-week price momentum study shows a bullish divergence but like the daily chart I do not think this is going to spark a rally.
In this Point and Figure chart of PCG, below, we can see that the software is projecting a downside price target of $3.81. Ouch.
Bottom line strategy: The morale of these charts (above) is do not fight a trend - up or down.
