The Dow is now back in the red for the year with a YTD decline of 15 bps. The average stock in the index is still up, but only slightly at +15 bps. Below is our trading range screen for the 30 stocks in the Dow. For each stock, the dot represents where it’s currently trading, while the tail end represents where it was trading one week ago. The black vertical “N” line represents each stock’s 50-day moving average, and moves into the red or green zones are considered overbought or oversold.
A few weeks ago, the bulk of Dow stocks were overbought, but now there are more stocks oversold (12) than there are stocks trading above their 50-days (10). Only three stocks in the index have not moved lower within their ranges over the last week (CAT, GS, JPM), and these three names are essentially flat. Stocks like Apple (AAPL), IBM, Intel (INTC), Johnson & Johnson (JNJ), Coca-Cola (KO) and Verizon (VZ) have moved sharply lower within their ranges. CVX, KO, PG, VZ, and WMT are all trading in extreme oversold territory — more than two standard deviations below their 50-days.
Slowly and steadily over the last few weeks, we’ve seen share prices erode across the equity market. We’ll be approaching break-down levels shortly if the declines continue.