Chart of the Day: Paccar Is Stuck in Reverse
Is all the bad news now priced in?
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Just a nasty move to the downside for Paccar (PCAR). Lower highs, lower lows is the textbook definition of a downtrend, and falling some 15% over the past several weeks puts this stock in correction territory.
The rise in interest rates and oil that has been a negative for this commercial truck manufacturer. Paccar makes diesel trucks, and we all know where diesel prices are at. That’s right, all-time highs, and that hits hard for truck designers.
It is difficult to predict where oil prices are going since the Iran war is fluid, but a lack of diesel or continued high prices will make it difficult for companies to consider purchasing what Paccar is producing. This is reflected in the chart — that perhaps earnings are going to take a hit over the coming quarters.
Has the market discounted all the bad news? It is hard to say but certainly a 15% correction says it could be true.
Money flow is awful, and the trend is strong with the ADX rising up and hitting near 40. Meanwhile, MACD is on a sell signal and the candles are purple, which reflects a strong bearish chart. Volume really picked up lately to the downside.
There’s nothing bullish on this chart here except that one spot in May where buyers came in. I suspect if oil prices ease we could see Paccar move back up, but that outcome is uncertain.
We like Paccar in TheStreet Pro Portfolio and rate it a One, or “buy at anytime.”
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At the time of publication, TheStreet Pro Portfolio was long PCAR.
