Is Whirlpool Headed Down the Drain After Issuing Disappointing Guidance?

Whirlpool Corp. (WHR)  posted fourth-quarter earnings that were better than expected after Monday's market close but also issued disappointing guidance for sales and earnings in 2024 as the appliance maker faces pricing and cost pressures. The guidance has sent the shares down nearly 5% in premarket trading on Tuesday, so let's check out the charts and indicators to see what might be ahead for Whirlpool, which Real Money Pro's Bob Ciura identified as a dividend play last fall.

In this daily bar chart of WHR, below, we have to imagine prices trading around $113 Tuesday morning. Prices could easily retest the 50-day moving average line, but weakness below $110 is the real level to watch to see if the bears get the upper hand. WHR continues to trade below the negatively sloped 200-day moving average line. The trading volume has been more active the past three months and suggests increased investor interest. The On-Balance-Volume (OBV) line has been weak the past 12 months. The Moving Average Convergence Divergence (MACD) oscillator is back below the zero line. 

In this weekly Japanese candlestick chart of WHR, below, I can see that prices have been cut in half the past three years, and a 50% haircut can sometimes attract institutional interest (aka buying). The 40-week moving average line has been in a negative trend for a long time now. The weekly OBV line shows us a long decline to a temporary low in November. The MACD oscillator is below the zero line. 

In this daily Point and Figure chart of WHR, below, I can see an upside price target in the $134 area but today's decline has not been plotted. Weakness below $109 may be needed to turn this chart bearish. 

In this weekly Point and Figure chart of WHR, below, I can see the software is giving us a downside price target in the $96 area, which would be a retest of the October nadir. 

Bottom line strategy: WHR made a low in late October and that low may hold for the foreseeable future. In the short run WHR is likely to trade sideways, but a close below $110 could precipitate further declines. 

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