I Can See Some Large Pores in Estee Lauder's Charts
The makeup is off, so let's check the technicals and examine whether we can see any new lows.
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Estée Lauder EL disappointed with sales and earnings outlook for fiscal 2025 when it posted its quarterly earnings this morning. The stock is trading sharply lower in the premarket.
If this is a surprise, remember the charts and indicators were bearish in my last review on Aug. 12.
In this daily bar chart of EL, below, I can see a bearish setup. Prices have weakened the past year. EL trades below the declining 50-day moving average line and below the declining 200-day moving average line.
The trading volume has increased the past six or seven weeks and tells me that traders are voting with their feet and selling EL. The On-Balance-Volume (OBV) line has been weak since early April as traders are more aggressive sellers. The Moving Average Convergence Divergence (MACD) oscillator has been below the zero-line since April - no trend strength being shown.
In this weekly Japanese candlestick chart of EL, below, I can see that EL has been on a downward path the past three years. The 40-week average line has a negative slope. The weekly OBV line tells us that sellers have been way more aggressive than buyers with heavier volume being traded in weeks where prices have closed lower.
The MACD oscillator remains in a bearish alignment below the zero-line. The candles have yet to show us lower shadows telling us that traders are rejecting the lows.
In this daily Point and Figure chart of EL, below, I can see an upside price target for now but weakness on Monday could turn this chart bearish again.
In this weekly Point and Figure chart of EL, below, I used a five box reversal filter and I can see that prices reached and exceeded a downside price target in the $90 area.
Bottom line strategy: EL is trading lower in the premarket but has not yet hit a new 52-week low. A new low for the move down should refresh the downtrend and reward the bears. Don't fight the tape even if a new low does not happen.
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