October 31 Chart of the Day - Moody's Corporation
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Moody's Corporation (MCO) is listed as one of Berkshire Hathaway's top 30 holdings so by default the company gets a lot of attention.
They recently reported third-quarter 2023 adjusted earnings of $2.43 per share, which handily beat the Zacks Consensus Estimate of $2.35. The bottom line also jumped 31% from the year-ago quarter figure.
All sounds like pretty good fundamental information to people like Warren Buffet, often referred to as the "Oracle of Omaha."
But we prefer looking at a chart with a price action technical analysis lens.
Starting on the monthly chart we can see like many equities that this stock is well off its $407.94 all time high (ATH) established back in October 2021. In just 11 short months after that price fell to the $230 area which coincided pretty much with the 61.8% Fibonacci retracement as well as support/resistance level in the same area.
And we can see that's where the buyers stepped back in driving the price back up to the $360 area before once again drifting lower.
Now that we've reviewed the monthly chart in an attempt to establish a market sentiment we drill down to the weekly chart in search of bi-directional levels of interest.
Trading around $306 earlier today price has returned to an area that it has spent many weeks near and around during the last two years - $300. Falling below and breaking above a few times only to come back to this big round number.
Now we can also see a wedge formation by the precensce of a downward sloping trend line and an upward sloping trend line. Experience tells us that price can ping pong for a very long time between these levels before making a more permanent decision on which direction it wants to go.
In the meantime, we've used additional bull and bear Fibonacci levels within the wedge from which investors and traders can formulate their plans.
If you'd like to learn more about Fibonacci you can download our FREE Fib Guide.
We'll be watching this chart along with many others with great anticipation.
So what's next?
We don't make predictions...
Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.
- Support/Resistance
- Trend
- Fibonacci
- Supply/Demand Zones,
- Change Control Zones
Take a look at the charts and let us know what you think.
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