A caller on Mad Money Monday night asked about Dropbox (DBX) : "They are doing well but the stock is doing badly. Under $20 it would be a steal," said Jim Cramer. $20 may be a steal but $18 or lower could be a gift horse. Let's check out the charts and indicators of DBX.
In this daily bar chart of DBX, below, we can see that prices are below the cresting 50-day moving average line and the declining 200-day line.
The chart below suggests we may find some support around $21 because it held there in March, April and early June. Prices did not spend a lot of time at $21 so in my book I do not consider this serious or important support.
The On-Balance-Volume (OBV) line shows a peak in early July followed by a decline which suggests that sellers are now more aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator has moved below the zero line for an outright sell signal. I don't see a reason to be a buyer of DBX.
In this weekly bar chart of DBX, below, we don't have three years of price data, but the history we have is not bullish. Prices are below the declining 40-week moving average line.
The weekly OBV line has turned down from early July and the MACD oscillator is about to generate a sell signal.
In this weekly Point and Figure chart of DBX, below, we can see a possible downside price target just below $18.
Bottom line strategy: Readers of Kamich's Korner know that I prefer to buy strength but if you are looking to go long on weakness you probably want to put the odds in your favor and use a limit order below the market. Try $18 for DBX.