Chart of the Day: Trouble Is Brewing for This Holding
The stock failed to hold strong support recently and is strongly bearish.
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Eaton (ETN) may have the strong fundamentals in energy and as a player in the AI space, but the chart is telling us that investors/traders are simply not seeing it.
The stock is in a downtrend, seen clearly with a series of lower highs and lower lows. And this well-defined channel has more downside here as we could see a lower low if the $320 level does not hold. The bottom of the channel comes in around $275, which would mark levels not seen since April.
The moving average convergence divergence (MACD) is on a sell signal, and checking out the ADX in pane 3, the trend is strong. This indicator does not tell us which direction, rather just the strength of the trend. It is down as mentioned above, so we need to be careful of a speeding train heading down the wrong track.
Money flow is bearish again, and volume trends are bearish too as we see plenty of down sessions on heavy turnover.
It is not time yet to buy the dip in Eaton, but that time may be coming soon. It is best to hold your fire and wait for the stock to stop going down.
We like Eaton in TheStreet Pro Portfolio and rate it a One, or " buy at anytime."
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At the time of publication, TheStreet Pro Portfolio was long ETN.
