3 Blue Chips Whose Charts Are Screaming ‘Sell!’

... and three more where caution is in order

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3 Blue Chips Whose Charts Are Screaming ‘Sell!’

Coca-Cola (KO), which is sitting right at its 200-day and is less than a dollar away from its lower trendline at $38.50, is coming close to worrisome territory — particularly in light of the fact that the stock is trading at a hefty forward P/E of 17.4:

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Exxon Mobil (XOM) has weakened after its soft second-quarter earnings report, and yesterday it crossed below its 200-day MA. Alone, a break of the 200-day hasn’t been a reliable signal for XOM, but the stock also is approaching a two-year lower trendline (currently at $88.75) as well as another trendline that dates back to mid-2010 (currently at $86.10). This indicates the stock has little margin for error remaining before it begins to sustain meaningful technical damage.

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Walmart (WMT) still has plenty of cushion before it reaches a breakdown point, but it’s close enough that it warrants attention. Those who own the stock, and who have a shorter-term inclination, should consider setting stops where the 200-day and two-year trendline intersect, at roughly $73.70.

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The Broader Implications

With three big names from diverse sectors already having broken down, and three more coming close, is there a message here regarding the broader market?

That doesn’t appear to be the case — the S&P 500 is still far away from either its 200-day or its lower trendlines, as are the mid- and small-cap indices.

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For now, then, consider these charts to be a signal for trading these six individual names rather than a signal about overall market conditions.

As of this writing, Daniel Putnam did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2013/08/three-blue-chips-where-the-charts-are-screaming-sell/.

©2014 InvestorPlace Media, LLC

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