10/27/99
Allied Signal (ALD)
Points to watch: Allied
Signal's decline from its June high has accelerated in recent weeks, with
the stock falling through numerous support levels. On October 19th
the stock closed below its 200 day moving average (56.37) for the first
time since February 5th. Yesterday the stock was unable to hold support at
the 50% retracement level (53.13, the 50% retracement of ALD's
January-June rally) and closed at 52.38.
Technical
indicators began to deteriorate before the stock's peak, and have
confirmed each move down; Daily RSI turned down in May and showed
negative divergence at the June price peak, daily MACD gave a sell
signal on August 12th, weekly stochastics gave a sell in early October,
daily and weekly OBV are in downtrends.
The
stock is a sell, or short below the 50% retracement level at 53.13.
Minor downside support exists at 49.5, with major support at 46.75.
