I'm Losing My Thirst for Monster Beverage
Monster Beverage Corp. (MNST) is known for high energy and extreme sports drinks (e.g. Monster Energy, Relentless and Burn).
In my last review of the charts of MNST on October 24 I had a negative view of the charts. Let's see if anything has changed for the positive.
In the updated daily bar chart of MNST, below, I can see that the shares made a recovery from a low at the end of October but they made a top in March. MNST has turned lower again and has declined below the 50-day and 200-day moving average lines. The slopes of both of these indicators have turned negative.
The On-Balance-Volume (OBV) line shows us weakness from a high in January. A declining OBV line tells us that sellers of MNST have been more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator turned bearish in April.
In the weekly Japanese candlestick chart of MNST, below, I see what we might call a large double top pattern at the $60 level. A weekly close below $48 would "complete" the top pattern and open the way to further declines.
The weekly OBV line has been weakening since August. The MACD oscillator is in a bearish alignment below the zero line. Prices are trading below the negatively sloped 40-week moving average line.
In this daily Point and Figure chart of MNST, below, I can see a downside price target in the $43 area.
In this weekly Point and Figure chart of MNST, below, I used a five-box reversal filter, which suggests we could see a decline to the $31 area.
Bottom-line strategy: MNST shares could stage an oversold bounce at any point but the trends are pointed lower and traders should avoid the long side of MNST.
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