Don't Ignore This Chart!

More Bad News Ahead for CBS?


The chart for CBS Corp (CBS) is already bad news and the news could get even worse. 

First and foremost, the long-term trend is clearly down as the stock hit a 52-week low in early November and remains below the falling 200-day SMA. The stock also broke below the May-June lows during the move to new lows. 

The shaded area around 60 marks a resistance zone that could give way to a reversal. First, the broken support zone turns into a resistance zone. Second, notice that the November-January rebound retraced 50-61.8% of the prior decline. Third, the falling 200-day SMA is in the 60.5 area. 

There are two things to watch for a reversal. First, a MACD move below zero would signal that the 12-day EMA moved below the 26-day EMA. Second, a move below the wedge line at 56.5-57 would start a pattern break. Such moves could signal the end to this corrective bounce and the resumption of the bigger downtrend. Note that CBS reports earnings on February 15th. 

Plan Your Trade and Trade Your Plan.

- Arthur Hill, CMT

Senior Technical Analyst,

Book: Define the Trend and Trade the Trend
Twitter: Follow @ArthurHill

Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
Subscribe to Don't Ignore This Chart! to be notified whenever a new post is added to this blog!
comments powered by Disqus