Is Walgreen Boots Finally Done Falling?
Walgreen Boots Alliance has trended lower since mid-2015. However now it could be showing signs of a historic turn.
The first thing that jumps out on this chart is the false breakdown in late October, followed by signs of a higher low this month. Notice how WBA knifed under $34 before spiking back above $44.
Next, where are prices stabilizing? The current level around $38 is important for two reasons. First, it roughly matches the peaks October 16-23. Second, it’s on top of the downward sloping trend line. That means WBA could be finding new support at old resistance.
Third, the 50-day simple moving average (SMA) has turned positive and the stock is now bouncing at it.
Stochastics show an oversold condition as well.
Finally, the long-term momentum has been improving. MACD has been rising on the weekly chart for more than a year – even as prices made lower lows. That’s bullish divergence.
WBA fell last week after Amazon.com launched its Pharmacy service. However the fundamental story showed a surprising turnaround last quarter. Speaking of fundamentals, WBA's forward P/E ratio is in the single digits. That makes it a potential “value stock,” which is the kind of name investors are now seeking.
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The first thing that jumps out on this chart is the false breakdown in late October, followed by signs of a higher low this month. Notice how WBA knifed under $34 before spiking back above $44.
Next, where are prices stabilizing? The current level around $38 is important for two reasons. First, it roughly matches the peaks October 16-23. Second, it’s on top of the downward sloping trend line. That means WBA could be finding new support at old resistance.
Third, the 50-day simple moving average (SMA) has turned positive and the stock is now bouncing at it.
Stochastics show an oversold condition as well.
Finally, the long-term momentum has been improving. MACD has been rising on the weekly chart for more than a year – even as prices made lower lows. That’s bullish divergence.
WBA fell last week after Amazon.com launched its Pharmacy service. However the fundamental story showed a surprising turnaround last quarter. Speaking of fundamentals, WBA's forward P/E ratio is in the single digits. That makes it a potential “value stock,” which is the kind of name investors are now seeking.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
