NGL Energy Partners (NGL) was downgraded today by theStreet.com's quantitative service. I look at the list of quantitative upgrades and downgrades each and every day to check on stocks that are not normally on my watch list. Over the past couple of years I found this to be a good source of trading ideas and stocks I want to avoid.
Let's see what the charts and indicators as a rating change is just of part of how you may want to look at stocks.
In this daily bar chart of NGL, below, we can see a peak in late January followed by a decline that cut prices from over $25 to less than $10. There is a big downside gap in late April with heavy volume and a smaller gap early this month. Prices are below the declining 50-day average and the declining 200-day line. The On-Balance-Volume (OBV) line peaked in January/February and has worked steadily lower signaling more aggressive selling. In the lower panel the momentum study has made lower lows recently, in line with the price action.
In this weekly bar chart of NGL, below, we can see that prices are below the declining 40-week moving average line. Prices are poised to test the lows of early 2016. The $10-$7 area is likely to provide some support. The weekly OBV line is bearish and pointed down as is the weekly MACD oscillator.
Bottom line -- a quantitative downgrade and weak daily and weekly charts suggest that NGL is headed lower in the weeks ahead.
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However, please note that our Quant Ratings service assesses stocks using a proprietary computer model that runs a variety of factors through quantitative and technical analysis. Ratings do not necessarily reflect the opinions of Jim Cramer or other columnists, who may use different criteria to grade stocks.
(This column originally appeared at 2:51 p.m. on Real Money, our premium site for active traders. Click here to get great columns like this from Bruce Kamich, Jim Cramer and other writers even earlier in the trading day.)