Bear Chart of the Day -- Buffett's Berkshire Hathaway Has Stalled

NEW YORK (Real Money) -- It was only three weeks ago when I had this bullish stance on Berkshire Hathaway  (BRK.A) (BRK.B).

I drew out the following conclusion: "I wouldn't expect a ton of upside, but I'm looking for Berkshire shares to finish the summer north of $150 with $148 to $150 the short-term six-week target."

I'm going to go with partly correct here. It only took a few days for Berkshire to reach $148.50 before stalling. Now, looking at the current daily chart, I have to say only the first part of the thesis has any merit. I'm turning cautious on Berkshire here.



The latest pullback in Berkshire will set up some resistance in the $148 area now with the failed breakout continuation. Price has retraced right back to the area I pegged it as bullish. Unless we bounce in the next one or two days off $143, this one feels like it is bound to test the lower end of the current trading channel which puts us near $139. The overall market will have an influence on this name, but we still have to respect the current setup. Momentum and trend are both bearish and failing.

I wouldn't say price has broken down yet, but both the Relative Strength Index and slow stochastics are breaking down. I would ignore this at your own risk. I can't see any reason to be bullish again until we take out the recent highs on price and the Chaikan oscillator. They've worked well as a pair recently, so that's where I will put my focus, on price action plus volume with a glance at momentum and trend.

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