Our Take on WBA After Brutal Forecast

TheStreet Pro readers should not be surprised by the weak price action of Walgreens Boots Alliance WBA on Thursday morning. The drugstore chain reported its latest quarterly numbers this morning and warned investors on consumer pressures and future store closures.

In my May 21, 2024 review of the charts of WBA, I wrote that "Trends are real and they can persist. The persistent trend in WBA has been down. No bottom has begun to form so further declines are possible. Avoid the long side of WBA."

Let's check out the charts again.

In this daily bar chart of WBA below, I can see that prices have been in a downward trend the past year. Prices are set to open Thursday at a new low for the move down. WBA trades below the negatively sloped 50-day and 200-day moving average lines. The daily volume has remained steady on the decline. 

If trading volume dried up, it would be a positive development. The daily On-Balance-Volume (OBV) line has been in a straight-line decline the past year and tells me that sellers of WBA have been more aggressive than buyers the past year. The Moving Average Convergence Divergence (MACD) oscillator has been below the zero line for most of the last year.

In this weekly Japanese candlestick chart of WBA below, I see only weakness. Prices are in a strong and persistent downward path. Prices trade below the declining 40-week moving average line. The weekly OBV line and the MACD oscillator are both bearish. No reversal patterns to be seen.

In this daily Point and Figure chart of WBA below, I can see a downside price target in the $8 area.

In this weekly Point and Figure chart of WBA below, I can see a price target in the $8 area, the same as the daily chart above.

Bottom line strategy: My advice remains the same: Avoid the long side of WBA. Further declines are likely and a bottom formation will take a long time to develop.

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