Zebra Technologies Corp. (ZBRA) was mentioned during Jim Cramer's "Mad Money" Wednesday evening. The stock is sharply lower today and tested the rising 200-day moving average line. Let's check out the rest of our favorite indicators and charts.
In this daily bar chart of ZBRA, below, we can see an uptrend from August, but prices have not made a new high since April. An uptrend is a series of higher lows and higher highs but as just noted prices have not (yet) made a higher high.
A decline below $168 will be a lower low and turn the trend bearish. The On-Balance-Volume (OBV) line is still in an uptrend, but the line looks like it is rolling over signaling a shift to more aggressive selling. The Moving Average Convergence Divergence (MACD) oscillator has narrowed and looks poised for a bearish crossover.
In this weekly Japanese candlestick chart of ZBRA, below, we can see a strong rise the past three years.
The rising 40-week moving average line has done a great job in identifying the uptrend and highlighting a number of buy signals along the way. The decline Thursday is not on this chart, but we can imagine a test of the rising 40-week moving-average line. The weekly OBV line should be edging lower and a buy signal from the Moving Average Convergence Divergence (MACD) oscillator is likely to get reversed by the price weakness. A close below $165 on this chart will be bearish.
In this updated Point and Figure chart of ZBRA, below, we can see a potential downside price target of around $156.
Bottom line strategy: Sometimes sharp moves lower are buying opportunities, if prices recover. Sometimes sharp declines are the start of a downtrend. I don't know at this juncture in time, which example we are looking at.