Walgreen was a stock I last considered back in March this year and at that point, it was trading at $51.78 per share and as I outlined in the post there were various volume price analysis anomalies which led me to conclude the stock was looking toppy and unlikely to continue with any bullish sentiment in the longer term which has indeed proved to be the case. In fact, the $52 per share level proved to be significant as it was the price at which bearish sentiment really took hold with the price finally plunging at the start of July with a volatility trigger on the candle and associated with extreme volume and heavy selling. This continued into the following day as the price waterfall developed taking the down to a low of $45.09 before last week’s minor rally off the extremes of the VPOC histogram to the right of the chart. So where next for this stock?
And to answer this question we need to move to the weekly chart which is revealing, and confirms the strength of the technical price-based resistance at $55.80 which capped the bullish rally and denoted with the red dashed line of the accumulation and distribution indicator. Below the current price, we have the volume point of control (VPOC) denoted with the yellow dashed line and waiting at $41.60 per share, whilst above is a level of potential price-based support just below $44 per share. So there are reasons to be cheerful for this stock, but in the short to medium term, it looks set to track lower, and down into the low 40’s before finding some much-needed support.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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