Black & Decker (BDK) Downtrend
[caption id="attachment_46" align="alignnone" width="588" caption="SmarTrend BDK Chart"]
After an amazing run in March, SmarTrend called a Downtrend on BDK on 5/11/09 at $34.29. The prior Uptrend, called on 3/18/09 at $25.64, returned an astounding 33.7%! However, in early May, our proprietary NBDV and IBDV indicators reached overbought levels and started to trend lower, indicating that lower prices were to come. Since SmarTrend made its Downtrend call on May 11th, BDK shares have since fallen 13.7% while the S&P is actually up 1.6%.
Several things are notable. BDK was approaching its 200-day moving average which it failed to attain and the 30-day moving average started to flatten out indicating that the upward momentum (more than 100% from the March 4 low) had slowed. This confluence of events all contributed to the DownTrend call. The stock initially found some support at the 50-day moving average but has since been fading on lower volume. With the major moving averages sloping down and the 30-day moving average bearishly crossing below the 50-day moving average, BDK has the potential for even lower prices in the near term.
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