Five Stocks That Could Become A Drag On The Dow, Questioning A Continued Bull Market

Disclosure: I have no positions in Boeing, Chevron, Disney, Home Depot or Verizon.

The Dow Jones Industrial Average set an all-time intraday high of 18,351.36 on May 19 just as earnings season was coming to an end for the 30 components of this benchmark index. Friday’s close of 18,232.02 had the Dow up just 2.3% year-to-date and 0.7% below the all-time high. Not ending the week above my semiannual pivot at 18,328 is a warning but the index is still above my monthly pivot at 18,199.

The weekly chart for the Dow 30 ended last week positive but overbought with the index above its five-week modified moving average of 18,081 with the 12x3x3 weekly slow stochastic reading rising above the overbought threshold of 80.00 at 80.41. In this environment there are five stocks that are showing deteriorating technical profiles which questions the sustainability of continuing a bull market for stocks. Here are their profiles.

Boeing may be up 11.4% year-to-date but the stock has declined from an all-time intraday high of $158.83 on Feb. 20 to as low as $140.43 on May 6. Friday’s close of $144.81 is above its 200-day simple moving average of $136.41 and below its 50-day simple moving average of $149.26.

The weekly chart is negative with the stock below its five-week modified moving average of $147.17 with its 200-week simple moving average of $102.18. The 12x3x3 weekly slow stochastic reading declined to 37.65 last week from 40.96 the week of May 15.

My semiannual value level is $139.59 with a monthly risky level of $150.89.

Chevron is down 6.5% year-to-date and the stock slipped below its 50-day simple moving average of $107.27 last week and has been below its 200-day simple moving average since Sept. 24 when the average was $122.89. The 2f00-day SMA has declined to $112.77 since then.

The weekly chart shifted to negative with last week’s close of $104.89 below its five-week modified moving average of $107.32 with its 200-week simple moving average of $113.28. The 12x3x3 weekly slow stochastic reading declined to 61.29 last week from 64.33 the week of May 15.

My monthly value level is $92.02 with a weekly risky level of $108.35.

Disney (DIS) may be up 17.1% year-to-date but the stock has declined from an all-time intraday high of $113.30 on May 5 to as low as $107.67 on May 12. Friday’s close of $110.12 is above its 50-day and 200-day simple moving averages of $108.11 and $96.71, respectively.

The weekly chart will shift to negative if the stock ends the week this Friday below its five-week modified moving average of $108.48. The 200-week simple moving average lags at $65.25. The 12x3x3 weekly slow stochastic reading declined below the overbought threshold of 80.00 last week for a reading of 79.68 which is a negative divergence for the stock.

My weekly value level is $108.43 with a quarterly risky level of $112.72.

Home Depot may be up 6.8% year to date but the stock has moved sideways to down since setting an all-time intraday high of $117.99 on March 20. The stock traded as low as $106.62 on April 30 then rebounded to $116.48 on May 19 in reaction to quarterly earnings. That day was a “key reversal” as the stock closed that day below the May 18 low of $113.16. The stock is below its 50-day simple moving average of $113.05 with its 200-day simple moving average of $102.48.

The weekly chart ended last week negative with the stock below its five-week modified moving average of $112.55 with its 200-week simple moving average of $71.37. The 12x3x3 weekly slow stochastic reading declined to 56.25 last week from 57.83 the week of May 15.

My weekly value level is $108.77 with a quarterly pivot of $112.37 and a semiannual risky level of $115.6.

Verizon (VZ) may be up 6% year to date but the stock has been moving sideways since setting an all-time intraday high of $54.31 back during the week of May 3, 2013. The stock has been trading back and forth around its 200-day simple moving average since August with that average now at $48.93. The stock closed Friday at $49.61 also above its 50-day simple moving average now at $49.52.

The weekly chart will shift to negative if the stock closes this week on Friday below its five-week modified moving average of $49.59 with its 200-week simple moving average of $45.59. The 12x3x3 weekly slow stochastic reading declined to 79.02 last week falling below the overbought threshold of 80.00 with a reading of 82.99.

My annual value level is $46.50 with a quarterly pivot of $47.89 and semiannual risky level of $52.85.