Is It Time to Chuck Charles Schwab?
Shares are having a rough go of it after second-quarter results. Here's what traders need to watch.
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On Tuesday Charles Schwab Corp. SCHW reported a marginal second-quarter earnings beat, and in-line revenue. The stock dropped on the report and continued to skid on Wednesday.
Let's check out the charts and indicators.
In the daily bar chart of SCHW, below, I can see that the share price made a lower high in July before Tuesday's downside price gap. The shares are now trading below the cresting 50-day moving average line. The slower-to-react 200-day moving average line is rising but it intersects at $66 and that is not all that far away now.
The On-Balance-Volume (OBV) line has been struggling and has made lower highs since the beginning of the year. The Moving Average Convergence Divergence (MACD) oscillator has been weakening since December and is now below the zero line.
In the weekly Japanese candlestick chart of SCHW, below, I can see that the shares have made lower highs the past three years. Prices are testing the rising 40-week moving average line.
The weekly OBV line has struggled the past year or more and suggests further price weakness ahead. The MACD oscillator crossed to the downside in May.
In this daily Point and Figure chart of SCHW, below, I can see a downside price target in the $60 area.
In this weekly Point and Figure chart of SCHW, below, I can see a price target in the $59 area.
Bottom-line strategy: Charles Schwab is now 86 years old and I wonder if he was still doing commercials for the firm he started in the early 1970's would he have that stoic look of confidence? The charts of SCHW do not give me confidence at this point in time.
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