Skip to main content

Arm Holdings Looks Stretched as It Continues to Ignore Technical Signals

Can it keeping legging out higher ground?
Comments

I last reviewed the charts and indicators of Arm Holdings plc ARM on Dec. 18, when I wrote, "Traders who may have purchased shares of ARM should consider reducing their exposure. Traders who have no exposure should stay on the sidelines as a pullback is looking likely now."

ARM dipped slightly for two days thereafter and then continued higher despite my call for a pullback. Now what? Let's go back to Arm's charts to try to answer that question.

In this daily bar chart of ARM, below, I can see that the share price of ARM has moved higher into year-end, staying above the rising 10-day and 20-day moving average lines. The trading volume has slowed but the On-Balance-Volume (OBV) line continues to rise. The 12-day price momentum study has made higher highs and does not show us a bearish divergence.

Image placeholder title

In this daily Japanese candlestick chart of ARM, below, I can see that Thursday's advance refreshed the uptrend after a number of small real bodies.

Image placeholder title

In this weekly Japanese candlestick chart of ARM, below, I can see seven new highs since the end of October -- Arm is getting stretched.

Image placeholder title

In this daily Point and Figure chart of ARM, below, the software shows us a price target in the $79 area. Here we are.

Image placeholder title

Bottom line strategy: There was a phrase I learned in 1976 working as a commodity broker for Merrill Lynch -- calling the market is easy, getting it to answer is hard. Keeping that in mind, I would be cautious about trading ARM from the long side now.

Employees of TheStreet are prohibited from trading individual securities.