Chart of the Day: Mastercard Only Sees Green if Consumers Spend Green
Rumors of shoppers slowing down have hit this big credit card company in the worst way.
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The warnings from competitor Visa V singed Mastercard MA, even before the credit card company reports numbers next week. The consumer is cash-strapped and has been for awhile, yet that seems to be fine when the job market is robust.
When you have a job and it is easier to find one you tend to be loose with your credit, but when the situation deteriorates, we see spending habits of consumers slowing down.
Of course, a company like Mastercard relies heavily on the consumer to spend, spend, spend. But the chart of the stock is telling us that may not be happening. Now, we are not necessarily blending fundamentals with technicals, rather the chart can give us clues as to where the big money is flowing, and for Mastercard it is out of the name.
The chart shows a series of lower highs, lower lows, textbook downtrend. Candles in the top pane have been mostly pink or purple, bearish on the GoNoGo composite of indicators.
Nowhere in the technicals does it show big investors are accumulating the stock, including the money flow in the bottom pane. The moving average convergence divergence is on a strong sell signal, too. Nothing good here and not a reason to add yet, but if this $430 level holds firm for some weeks then, we may have something to work with.
We rate Mastercard a "Two" in TheStreet Pro portfolio, stockpile on pullbacks.
TheStreet Pro Portfolio is long MA.
