Industrial firm Owens Corning Inc. (OC) staged an important technical breakout in early December that ultimately led to a 25% rally over the course of two months. Not so coincidentally the industrial sector of the S&P 500 also broke out of an important area around the same time in December, which is important for correlation perspective.
When earlier this month (April) the industrial sector as represented by the SPDR Industrial XLI broke below its up-trend dating back to August 2012, Owens Corning Inc. (OC) did the same only to reverse back above the trend-line for a handful of daily closes. With yesterday’s broad market weakness however, the stock sliced back below the key up-trend once again, this time likely with more authority.
Closer up on the daily chart note that the stock has been developing a series of lower highs and lower lows since its early February top. As the stock rebounded last week it found resistance right at its 50 day simple moving average, where it left a bearish shooting star, which was then followed yesterday by confirmation selling. The stock looks ready to move lower still and the 200 day moving average, currently near the $35 mark, seems a good next target. The company does report earnings next week on April 24th, which is date that those involved in the name via this trade setup or otherwise, should circle.