There are some technically tired stocks out there that appear ready to succumb to traders that may be growing eager to lock-in short-term profits. Today’s three big stock charts examines recent activity in shares of Bristol-Myers Squibb Co. (NYSE:BMY), Cincinnati Financial Corporation (NASDAQ:CINF) and Hasbro, Inc. (NASDAQ:HAS) as these shares appear at-risk for selling pressure.
Bristol-Myers Squibb Co (BMY)
After a post-earnings rally of almost 18%, shares of Bristol-Myers Squibb are ready for a technical break.
BMY stock had been stuck in a series of stair steps lower over the last six months as everything from headlines and earnings have given traders reason to sell. The latest earnings report reversed this and put traders in the buying mood.
The Bristol-Myers charts are now telling us that the stock is ready for a break. Yesterday, BMY shares passed into overbought territory for the first time since mid-December. At that point, the stock only saw a consolidation, but there’s more to today’s chart.
Bristol-Myers Squibb stock is also running into some overhead resistance. Currently, the 50- and 100-day moving averages for the stock reside around $55. These trendlines have been catalysts for traders to sell shares in the past.
The combination of technical resistance from its trendlines and its overbought indication give BMY stock a short-term bearish outlook. Thus, we expect to see traders begin to take profits with a short-term target price of $51.
Cincinnati Financial Corporation (CINF)
This has been one of our favorite technical stocks for the past four years, but shares of Cincinnati Financial appear to be getting tired as they run into overhead resistance.
CINF stock is more than 7% from the post-earnings lows as investors are apparently less concerned about the company’s liability exposure to recent events.
The price movement shifts Cincinnati Financial shares into an overbought situation as of Thursday, indicating that we may see buying interest dry-up over the short-term. This also means that it will take less selling pressure to turn the stock lower.
In terms of selling pressure, CINF shares’ are seeing the potential for a lot of resistance at $74. This price marks the confluence of the stock’s 50-, 100- and 200-day moving averages. The simple fact that these trendlines are meeting at the same price makes the $74-level a hurdle. The fact that two of these trendlines, the 50- and 100-day, are trending lower adds to the difficulty of the stock clearing the hurdle.
Watch for any short-term reversal to target a move back to $70 for Cincinnati Financial as the intermediate-term trends suggest that the bears remain in control.
Hasbro, Inc. (HAS)
A clear earnings winner, Hasbro shares rallied more than 18% after their recent earnings report. HAS stock obviously shot into overbought territory, which is where it has resided for the last two weeks.
Now, a slight shift in momentum threatens to get some traders in the selling mood. Hasbro shares are drifting below $97.50, which has been the price point that we have seen traders begin to defend the stock. Volume this time around is lacking, suggesting that the HAS buying power rally has exhausted itself now.
With Hasbro shares trading far into new high territory it is hard to use a trendline to signal a trigger for selling; therefore, traders will watch round-numbered prices. At this time, $97 is the trigger that our analysis suggests will move HAS stock lower from its overbought conditions. Expect to see volatility in the trade as Hasbro shares target $90 to $92.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
