Since the beginning of 2014,
has been in a downtrend with the stock falling from a high of
$84.62 on January 10, to a low of $68.68 on April 11. I have
drawn the trendline on the
which marks the highs-sort of. In the case of Mastercard stock, I
couldn't help but notice that the high points tended to come on
the open. We see it in early January, late January and again in
March. The March high did exceed the open price slightly, but I
drew the trendline with the opening prices in mind.
The low earlier this month stopped at the 52-week moving
average and can be seen in the weekly chart below. It happened to
coincide with the stock hitting oversold levels on the weekly
chart as both the Slow Stochastic and
hit significant lows.
Something else that jumped out at me from the weekly chart is
how the stock has seen the short-term rallies halted at the
13-week moving average over the last few months. The trendline is
now rolling lower and threatening to make a bearish crossover of
the 52-week moving average.
It would seem that one of the two trendlines will have to give
way and it will likely happen in the near future. One event that
looms that could decide which trendline breaks and that is the
earnings report that will happen next Thursday, May 1.
Analysts expect the company to earn $0.72 per share this
quarter on revenue of $2.14 billion. The company missed on their
last earnings report and that contributed to the slide over the
last few months.
The sentiment toward MA is relatively
at this point with the short-interest ratio at 2.4 and the
current put/call ratio is in the 25
percentile ranking. There are 32 analysts following the stock and
24 have it rated as a "buy" while the other eight have it rated
as a "hold".
Despite the overbought status on the daily chart and the
oversold status on the weekly chart, I don't think you make a
play on Mastercard stock just yet. I think what you have to do at
this point is exercise patience and wait to see which of the
trendlines gives way-the 13-week moving average or the 52-week.
With only $5.80 between the two trendlines, you probably won't
have to wait very long. If it hasn't happened by next Thursday,
it will probably do it right after that.
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