Would these four dividend stocks really survive a government debt meltdown? I, for one, remember 2008, when everything went down, and there was no place to hide. When traders and investors need to raise money, they can and will sell everything. There are no sure things and no guarantees in this business.
That said, let's dig deeper on these stocks and look at their current technical positions.
Campbell Soup has been in roughly a $60-to-$66 range. Recently the 50-day simple moving average has turned down while the 200-day average is still positive. The on-balance-volume, or OBV, line has been weakening in recent weeks. There is a bearish divergence between the higher highs in February and May and the lower readings on the momentum indicator.
In this weekly chart of CPB, above, we can see prices are above the rising 40-week moving average. The OBV line is pointed up on this time frame. The moving average convergence/divergence oscillator has given a liquidate longs sell signal. We would have to label this chart positive, but a weekly close below $60 would quickly turn things bearish.
In this daily chart of General Mills(GIS) - Get Report , I see a possible ascending triangle pattern. Ascending triangles are typically bullish continuation patterns, meaning the prior bullish trend continues after the pattern completes. The pattern has the same high and resistance around $66, and there are higher lows at $60 and then $62. The OBV line is steady and positive. There is a small bearish divergence. A breakout to a new high without a significant surge in volume would also be a bearish event.
Even though this weekly chart of General Mills, above, is pointed up and above the rising 40-week moving average and the OBV line is rising, we can still find a "but": There could be two reversal points ahead. One is if we make an upthrust over $65 that is quickly rejected. A second reversal would be a close below $60. We'll be on watch for either.
McDonald's(MCD) - Get Report has been a strong performer in the past -- but that is the past, and we want to be forward-looking. When we look ahead, we have a few concerns. Prices are now below the 50-day moving average line but above the 200-day. It looks like the OBV line turned down about four weeks ago. The MACD oscillator is below the zero line, which tells us that we should be trading from the short side, but the two lines of the oscillator look like they could give a crossover cover shorts buy signal.
The key level to watch going forward is $115. A close below $115 would break the support at $115 and break the 200-day moving average. Two strikes!
This weekly chart of McDonald's has some interesting clues. Prices are still above the rising 40-week moving average line, but they have been coming down after being extended. The OBV line has been flat after a rise. The MACD oscillator has generated a liquidate-longs sell signal. The tipping point may be the bearish divergence on this time frame as prices made higher highs since November, but the momentum study has made a lower high. A bearish divergence may be foreshadowing a reversal to the downside.
In this daily chart of Walmart Stores(WMT) - Get Report , above, we can see a decent enough looking recovery from the November low, but there has been no increase in volume, and the OBV line is flat. Yes, prices are above the rising 50-day moving average line and the flattening 200-day. But when I see a rise for a stock after a big decline and volume is missing in action, I think rising wedge. During a rising wedge pattern, the stock goes up on vapors -- volume is largely by appointment only. A rally without volume is suspect and vulnerable.
In this last weekly chart of Walmart, above, we can see prices above the 40-week moving average line, which looks like it is just turning higher. The OBV line is a big disappointment to the bulls. The MACD oscillator is above the zero line, but the two lines are close together, so it does not show much "trend strength." To top it off, there is a bearish divergence between price and momentum. A close below $68 might set the bear in motion.