Shares of Linde Plc (LIN) made an impressive rally from September to December but now the music could stop and some traders may not find a seat if prices reverse direction.
Let's check out the charts and plot a strategy.
In the daily bar chart of LIN, below, I can see a sideways price pattern the past six or seven weeks that could turn sour. Prices gapped higher in October and then turned sideways in November, which carried into December. Buying interest (support) developed around $330 and that level needs to be watched closely. A close below $330 will mean that buyers of LIN in the past several weeks are under water -- or at a loss when they look at their brokerage statements.
Looking at the trading volume in October and November I do not see a strong expansion in turnover and that is not a positive. The daily On-Balance-Volume (OBV) has been stalled in recent weeks. A turn lower in the OBV line from here into year-end will be a negative development. The Moving Average Convergence Divergence (MACD) is above the zero line but is pointed lower.
In the weekly Japanese candlestick chart of LIN, below, I see a cautionary picture. The latest candle pattern shows an upper shadow telling us that traders are rejecting the highs.
The weekly OBV line has turned lower and the MACD oscillator is narrowing. Not a good combination.
In this daily Point and Figure chart of LIN, below, we can see that a price target of $343 has been reached but I see some risk -- a trade at $324 or $320 could turn this chart bearish. A trade at $348 or higher is needed to refresh the uptrend.
In this weekly Point and Figure chart of LIN, below, a price target of $387 is being projected.
Bottom-line strategy: Traders who are long LIN should tighten their sell stops to $327.
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