These 3 Dividend Stocks Are Down Big -- but Do Their Charts Say Buy?
This short list of beaten-down dividend payers by TheStreet's Ben Reynolds gets even shorter if we eliminate stocks with unattractive charts. But I can't say I'm surprised. Getting a dividend on a stock that is in a downtrend is worse than being the runner-up in my opinion.
To be a winner, we want a dividend and capital gains.
Apple
In this daily chart of Apple (AAPL) - Get Report , we can see that prices have been trading lower and lower for the past 12 months. The on-balance-volume, or OBV, line has been trending lower too, and it only does that when the volume of shares traded on down days is heavier than on up days. Simple math: Sellers of Apple have been more aggressive in liquidating their holdings. Prices are below both the declining 50-day moving average and the down-sloping 200-day average.
In the bottom panel is the 12-day momentum study. I do not yet see a bullish divergence between prices going lower but momentum going higher. The bears are still in control of Apple. With next chart support below the market in the $80 area, I am in no rush to position Apple from the long side.
TheStreet's Jim Cramer owns Apple in his Action Alerts PLUS portfolio. Cramer says Apple is a "schizophrenic stock" right now.
Cramer agreed with Bernstein analyst Toni Sacconaghi on Wednesday, saying the company needs to monetize its services businesses instead of relying on hardware sales. Sacconaghi placed a $1 trillion target on Apple's market cap based on that idea.
"[This] is something that I've been calling for and that would be helped by India and China," Cramer said. "Although that's really a domestic thing to some degree."
Still Apple shareholders will ultimately be fighting the Federal Reserve at home should it choose to hike rates multiple times, he cautioned.
Abbott Laboratories
In this daily chart of Abbott Laboratories (ABT) - Get Report , we can see another picture with lower lows and lower highs -- a downtrend. Prices are below their declining 50-day and 200-day moving averages. Abbott has not broken its January/February lows, but with a weak OBV line and no bullish divergences from the momentum study, it could be just a matter of time before new lows are made.
Even if Abbott doesn't make a new low, the chart is still not attractive. Sometimes it pays to be patient and wait for the chart to improve before jumping into the long side.
Franklin Resources
Unlike Apple and Abbott, Franklin Resources (BEN) - Get Report has been making a base pattern. We can see that after a late September low, the trend turned sideways. The price pattern could be an inverse head and shoulders bottom. September could be the left shoulder, and the head could be the January/February low. The right shoulder could be forming now.
The moving average convergence/divergence oscillator is close to a crossover below the zero line. Some traders will take this crossover as a buy signal or a cover-shorts signal.
