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Key Takeaways
- Walgreens Boots Alliance stock plummeted to a 27-year low on Thursday after the pharmacy chain and healthcare provider missed profit estimates and slashed its outlook amid weakening consumer demand.
- Walgreens shares started their long-term downtrend after toping out in August 2015, with the decline accelerating from July 2022 following a death cross, a bearish chart pattern that signals lower prices.
- Walgreens’ share price may reclaim the $14 level near a 1997 price peak in the short-term due to the RSI indicating oversold conditions below the closely-watched 30 threshold.
- Other historical price levels on the chart where shares may see support include $8.80 and $5.50.
Walgreens Boots Alliance (WBA), which currently leads the S&P 500’s worst-performing stocks in the first half of 2024, plummeted more than 22% to a 27-year low on Thursday after the pharmacy chain and healthcare provider missed profit estimates and slashed its outlook amid weakening consumer demand.
Given the stock’s fall to levels not seen since 1997, below we take a look at Walgreens’ monthly chart to identify historical areas where the stock may attract support.
Accelerating Long-Term Downtrend
Walgreens shares started their long-term downtrend after toping out just below $100 in August 2015, with the decline accelerating from July 2022 when the 50-month moving average (MA) crossed below the 200-month MA to form a death cross, a bearish chart pattern that signals lower prices.
Volume has increased substantially over this period, indicating larger market participants, such as asset managers and pension funds, have reduced or exited their positions in the stock.
Monitor These Historical Levels on Walgreens’ Chart
Despite the intensity of recent selling pressure, it may be worth keeping an eye on several key areas on Walgreens’ chart where the stock may see some buying interest.
Investors could monitor a 1997 peak around $14. Although the price currently trades below this level, there’s a possibility shares could reclaim this area in the short-term, given the relative strength index (RSI) indicates oversold conditions with a reading below the closely-watched 30 threshold. The last two times this indicator bottomed out below 30 in October 2020 and November 2023, the stock subsequently rallied 11.7% and 30.9%, respectively, the following month.
Another area of interest to watch sits around $8.80, a region where shares may find buyers near a period of 1996 consolidation.
A failure to hold above this level could see the stock fall to around $5.50, which aligns with the top trendline of a narrow channel between late 1992 and mid-1994.
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As of the date this article was written, the author does not own any of the above securities.