Don't Ignore This Chart!

Hasbro Hits Stiff Resistance Zone


I do not often highlight stocks with bearish setups during a bull market, but Hasbro shows some serious weakness over the past year and looks poised to peak again. 

First and foremost, the chart shows Hasbro (HAS) hitting a 52-week low in early April and this means the long-term trend is down. Also notice that the 50-day EMA is below the 200-day EMA and price is below the falling 200-day EMA.

Hasbro recently broke a support zone in March and bounced back to this zone in April-May. A basic tenet of technical analysis is that broken support turns into resistance. Also notice that the bounce retraced 50% of the prior decline, which is normal for a counter-trend rally. The combination of resistance and retracement suggests that the stock could reverse in this area. 

I would expect Hasbro to reverse in the 88 area and will watch two items for a signal. First, a break below the mid May low at 86 would signal a short-term downturn in price. Second, a signal line crossover in MACD would signal a downturn in momentum.

On Trend with Arthur Hill

On Trend is my show on StockCharts TV and it can been every Tuesday at 10:30 AM. The show repeats immediately afterwards at 11 AM ET and again throughout the week. There is also a video archive on Youtube. StockChartsTV and the video archives are available to everyone. 

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