This Online Retailer Is Headed for a New Low
A deep dive on the stock price charts for a major electronics retailer offers a warning to traders.
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JD.com Inc JD is an online retailer that sells electronics products and general merchandise.
Let's check out the charts and indicators.
In this daily bar chart of JD below, I can see that prices made lows in the first quarter of 2024. Prices rallied from early March into the middle of May. Prices have been pulling back or correcting since the middle of May. JD now trades below the cresting 50-day moving average line but above the bottoming 200-day moving average. The On-Balance-Volume (OBV) line moved higher from early March to the middle of May. The OBV line has weakened the past six weeks and tells me that sellers of JD are being more aggressive than buyers of JD. The Moving Average Convergence Divergence (MACD) oscillator has moved below the zero line for an outright sell signal.
In this weekly Japanese candlestick chart of JD below, I can see that the price of JD has made a long decline and shows some improvement. Prices trade above the 40-week moving average line but the slope of the line is still negative. The weekly OBV line has made a longer-term decline but shows some limited improvement in recent months. The MACD oscillator is slightly above the zero line but has narrowed significantly in recent weeks.
In this daily Point and Figure chart of JD below, I can see a potential downside price target in the $26 area.
In this weekly Point and Figure chart of JD below, I can see a potential price target in the $23 area.
Bottom line strategy: JD has made a low on the charts above but it has more work to do to develop its bottom. Keep your powder dry for a better buying opportunity in the weeks ahead.
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