It’s a tough way to go when your stock is not keeping up with the market, and even worse when there is a good chance of some downside action. These three names fit the bill.
While we will not weigh in with fundamental analysis on these issues, we will pop the hood for a look at the charts.
Let’s dig in:
A Break for Beloved Alibaba Spells Doom for Bullish Trend
Hard to believe a name like Alibaba (BABA) could be so weak when stock markets are rising. Yet, following decent earnings the stock has come under a great deal of pressure, with higher volume on the biggest down days. That is called poor relative strength and distribution, which we know is big money selling.
The break in the chart this past week is significant. You can see on the chart the triangle pattern was broken to the downside, and more follow-through cinches the new downtrend pattern.
MACD has rolled over and RSI is weak but not yet oversold. Therefore, a move to the $117 area is likely, even down the fill the gap at $110. Put in a stop at $140 just in case.
Baidu’s Uptrend Did Not Last Very Long
A budding move higher was looking good for Baidu (BIDU) in April but the stock found some resistance and made a sharp reversal. It is not a bad thing to pull back some from an overbought condition like this stock did this month, but the retreat seems to be too much, and supported by heavier turnover that has Baidu looking much more bearish than before.
MACD is on a sell signal now, RSI (top pane) is moving lower but is not oversold yet. Price action is bearish, with the 200-day moving average just below current levels, but more support much deeper down.
Let’s call a target at $105, an aggressive move, but logical considering where the stock failed to hold in late March. Put in a stop at $142 just in case.
Deere Shows Nothing Bullish in the Chart
The big tractor company Deere (DE) continued its downward spiral this past week after posting strong earnings but weaker guidance. The stock was obliterated Thursday on whopping volume, an indication of big institutional selling. That is call distribution and often leads to even more selling in the next move.
The triangle was broken to the downside; it seemed pretty obvious that would be case as the stock was spending more time in the lower part of the range.
Money flow is bearish now, MACD on a second straight sell signal, no momentum whatsoever. There is support in the $460’s area going back to late 2025, that would be a huge move. Let’s target that zone, it could take some time. Put in a stop at $550 just in case.
Money flow is bearish now, MACD is on a second straight sell signal, ao no momentum whatsoever.
There is support in the $460’s area going back to late 2025. That would be a huge move. Let’s target that zone, it could take some time. Put in a stop at $550 just in case.