A sell side firm recommended purchase of Turning Point Brands (TPB) , a leading manufacturer, marketer and distributor of branded consumer products including "alternative smoking accessories and consumables with active ingredients". Let's check out the charts and indicators.
In this daily bar chart of TPB, below, we can see that prices have declined since early August and its market cap has been cut in half. Prices trade below the declining 50-day moving average line and below the declining 200-day line. TPB is not extended (oversold) below the 200-day line.
The On-Balance-Volume (OBV) line declined into a March low and has moved sideways since then. This movement in the OBV line suggests a balance between buyers and sellers of TPB. The Moving Average Convergence Divergence (MACD) oscillator has been below the zero line for much of the past year.
In this weekly Japanese candlestick chart of TPB, below, we see a negative picture. Prices are in a longer-term downtrend as they trade below the negatively sloped 40-week moving average line. The weekly OBV line is pointed down and does not show the sideways movement of the daily line. The MACD oscillator is not showing us any trend strength.
In this daily Point and Figure chart of TPB, below, we can see that prices reached and exceeded a downside price target of $35.
In this weekly Point and Figure chart of TPB, below, we can see the same $35 price target.
Bottom line strategy: A fundamental analyst is willing to buy shares in a company when they are falling because they are undervalued, but a technical analyst wants to buy shares when they are trending higher. TPB has not bottomed so I will wait for more sideways price action in the $26-$30 area with signs of aggressive buying.
