Financial, retirement, investment and insurance company Voya Financial (VOYA) has been outlining a major top pattern on the charts the past two years. Large top patterns can precipitate large declines so let's see what risks are posed.
In this daily bar chart of VOYA, below, I can see a sideways to lower pattern the past year. Prices are trading below the declining 200-day moving average line and below the declining 50-day line.
The On-Balance-Volume (OBV) line shows a year-long decline and tells me that sellers of VOYA have been more aggressive than buyers for months. This kind of longer-term aggressive selling can evolve into a significant decline.
The Moving Average Convergence Divergence (MACD) oscillator is in a bearish alignment below the zero line.
In this weekly Japanese candlestick chart of VOYA, below, I can see a rounded top formation on VOYA going back some 2- 1/2 years. Prices are trading below the declining 40-week moving average line. The trading volume shows a heavier period at the top of the pattern. A potential neckline can be drawn across the lows from $55 to $57. A close below this neckline on heavy volume would mean the top was complete and a major decline had begun.
The weekly OBV line has been in a decline for two years. The MACD oscillator is bearish.
In this daily Point and Figure chart of VOYA, below, I can see a potential downside price target in the $52 area.
In this second Point and Figure chart of VOYA, below, I used weekly price data. The same $52 price target is shown but here we can see the scope of the top pattern and it is likely that a decline bigger than $52 is more likely.
Bottom line strategy: These four charts (above) of VOYA are bearish and it may only be a matter of time before prices begin a serious declining phase. Avoid the long side of VOYA.
