Featured Trade (U.S Stock): BlackRock looks set to resume a potential fresh impulsive down move

A potential new impulsive down move for BlackRock

Medium-term technical outlook (1-3 weeks) on BlackRock (BLK)



Key technical elements

  • In our previous “Featured Trade” report dated on 24 Oct 2018, BlackRock (BLK) had staged the expected corrective rebound and hit the target/resistance of 424.10/427.60. It printed a high of 425.40 on 07 Nov 2017. Click here for a recap. Right now, it is showing elements that advocate for a continuation of its impulsive down move within the medium-term downtrend in place since its 23 Jan 2018 high.
  • BLK had ended last week with a weekly bearish “Shooting Star” candlestick pattern right below the 427.60 key medium-term resistance which is defined by a confluence of elements. The the pull-back resistance of the medium-term descending channel support breakdown and the 23.6% Fibonacci retracement of the medium-term downtrend from 12 Mar 2018 high to 23 Oct 2018 low.
  • Momentum indicators are not showing any signs of bullish reversal yet. The longer-term weekly RSI oscillator has reached an extreme oversold level of 22 on the 2nd week of Oct 2018 but the recent rebound seen in price action of BLK has no led to a bullish divergence signal yet in the weekly RSI. In addition, the daily Stochastic oscillator has inched down from its overbought region after a prior bearish divergence signal.
  • The recent price action rebound from the 23 Oct 2018 low of 376.31 has been accompanied by declining volume.
  • The next significant medium-term support after 376.31 (the major ascending trendline from Oct 2011 low) rests at 343.00/336.85 which is defined by the long-term secular ascending channel support from Mar 2009 low, the 17/24 Oct 2016 major swing low area and a Fibonacci projection cluster (see weekly & daily charts).
  • BlackRock is one of the top 50 underperforming component stocks of the S&P 500 where its year to date loss as at 12 Nov 2018 is recorded at -21.85% versus a gain of 1.60% seen on the S&P 500.

Key Levels (1 to 3 weeks)

Intermediate resistance: 411.07

Pivot (key resistance): 427.60

Supports: 376.31 & 343.00/336.85

Next resistance: 467.15

Conclusion

BlackRock (BLK) now faces the risk of shaping a new impulsive down move within is medium-term downtrend in place since its 23 Jan 2018 all-time high level of 594.52 if the key medium-term pivotal resistance at 427.60 is not surpassed. A break below 376.31 shall see a further potential decline to target the next significant medium-term support at 343.00/336.85.

On the other hand, a clearance above 427.60 put the bears on hold for an extension of the corrective rebound towards the next resistance at 467.15 (the former medium-term range support of 02 Aug/12 Sep 2018, 38.2% Fibonacci retracement of the medium-term downtrend from 12 Mar 2018 high to 23 Oct 2018 low & the pull-back resistance of the former upper boundary of the long-term ascending channel from Mar 2009 low that its price action has been broken down on 08 Oct 2018).

Charts are from eSignal



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