Berkshire Hathaway Breaking Down from Triangle Top?

By | January 30, 2015

There are a number of interesting technical signals on the weekly and daily Berkshire Hathaway (BRK/B) charts. The strong run in the stock over the last three years is evident on the weekly chart but this week it is trading below its 50 day moving average, as the MacD is making a bearish crossover, the RSI has crossed out of an overbought condition, and the Money Flow Index, a volume-weighted relative strength measure has moved under its centerline. These indications reflect a coordinated decline in intermediate term price and money flow momentum.

31.BRK weekly chart

On the daily chart an apparent topping process is playing out within the confines of a complex two month triangle pattern. The MacD, RSI and MFI are all tracking below their centerlines on this timeframe, and the 20 day moving average has crossed below the 50 day average. Pattern support, also the December low, has been tested over the previous two days and is being retested in today’s session. A pattern breakdown projects a target price that reverts to the 200 day moving average.

31.BRK daily chart

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