Unilever N.V. (ADR) (NYSE:UN) ended the last trading session almost flat with a minor loss of 0.44%. Surprisingly, the volume surged to 7 million, more than 3 times the daily average of 2 million. The fast moving consumer goods company works through Foods, Refreshment, Personal Care and Home Care segments.
The technical picture of the Unilever N.V. (ADR) (NYSE:UN) has always been marked by sharp declines and then a gradual recovery with a new high following it. This was perfectly seen with the 1999 top giving way to a 15-month crash and then the recovery to the old high taking 7 full years. A new high came but the bulls couldn’t enjoy it for long as the biggest bear market came and the stock lost all the gains made in the previous 6 years. The next recovery took a V-shaped structure, suggesting a firmer focus on the part of the bulls this time still the 15-month decline took about 30 months for the recovery.
At this moment, the stock is only about 4% away from the life high of $45.22 but the last phase of this uptrend raises some uneasy questions for the bulls as the momentum looks weak. In the last 12 months, the stock hasn’t really gone anywhere despite making higher highs. Since the beginning of 2014, the entire advance has been retraced and then fully recovered, keeping the price almost in the same band of $37-$44 for the duration.
In the extreme short term, the stock has formed a small Double Top around $45.20 and now testing the intermediate channel that contains the entire rally of 2015. If the bears manage to drag the stock below that line, currently around $43 levels, then further decline to $41.00-50 can’t be ruled out or in the worst case, $39 levels.
