Walgreens Boots Alliance Inc (WBA) - January 24, 2024
DAILY STOCK REPORT: WALGREENS BOOTS ALLIANCE INC (WBA)
SIACharts’ relative strength rankings help investors manage risk by enabling them to identify stocks at risk of underperforming on both an absolute and a relative basis.
Drug store chain Walgreens Boots Alliance Inc (WBA) for example, dropped out of the green zone in the SIA NASDAQ 100 Index Report in June of 2021 and has spent most of the last two and a half years stuck in the Red Unfavored Zone. Since leaving the green zone, the shares have lost 57.7% of their previous value. Over the last year, WBA has lost 34.0%, while the NASDAQ has gained 28.6%.
Action within the rankings can also help investors distinguish between a bear market rally and an emerging recovery play. In late 2023, WBA climbed from the bottom to the top of the Red Unfavored Zone but faltered short of the yellow zone. Since the start of this year, the shares have dropped back, falling 28 spots in the rankings back down to 94th place, and have lost 13.5% year to date while the NASDAQ is up 2.7%.
Candlestick Chart Shows a Sideways Trend Emerging:
A downward trend in Walgreens Boots (WBA) that has been running for over two years, may be starting to bottom out. Over the late summer, support emerged in the $19.00 to $20.00 area which remains intact. At the end of 2023, the shares started to rally up off that base which was encouraging. Recent trading, however, suggests that the stock is not yet ready for prime time.
The year-end rally fell short of a previous support level and a long-term downtrend line near $27.00 resistance. Since then, the shares have been in a downswing, having taken out their 10-day average, although there was one day when they rebounded on volume. At this point, it appears that a $19.00 to $27.00 swing trading and base building range may be emerging.
Point and Figure Chart Sees a Bear Market Rally Fail:
Walgreens Boots (WBA) shares have been under distribution since the beginning of 2022 steadily declining in a downtrend of lower highs. Selling pressure intensified last summer and after finding support near $20.00, WBA shares ended the year with a big bounce. That bear market rally turned out to be short lived as the shares faltered short of $27.00 unable to even get back to previous lows/breakdown points. Into January, the shares have gone into retreat once again and have already given back more than 50% of their previous advance, triggering a bearish High Pole Warning.
Downside support may emerge in the $19.65 to $21.25 zone where previous column highs/lows cluster around the $20.00 round number. Initial resistance on a rebound appears near $23.95 based on a 3-box reversal.
With a bearish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 5 out of 10, WBA is exhibiting short-term weakness against the asset classes.
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