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4 Dow Losers You Should Sell Now — Plus 1 to Buy

The Dow's biggest losers? It sounds like a new reality show. After looking over this list of the nine worst-performing Dow stocks this year, I found four that could well suffer more declines and one that has upside promise.

Let's first put our best foot forward:


Microsoft (MSFT) has made a little upside progress in the past 12 months, but when we view the stock from different perspectives, we have to become more excited about the bull case in the months ahead. In this daily bar chart, we can see Microsoft gap up in October and then stall out and fall back again. Another upside attempt got underway in February, but by late April we gapped to the downside. Like the selloff in January and February, the most recent pullback has not gone all that far.

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Yet this weekly chart of Microsoft is pretty positive. The slope of the 40-week moving average line is positive as it has been for much of the past three years. The on-balance-volume, or OBV, line has been constantly rising the entire time, telling us that buying has been more aggressive than selling. This suggests that the sideways price action in recent months could ultimately give way to new highs for the move up.

This promising-looking OBV line on a weekly timeframe is not matched on the daily chart. While the two timeframes don't match up, the tie, in my opinion, goes to the longer timeframe. The moving average convergence/divergence oscillator is pointed down but could turn up again if Microsoft rallies.

The third chart is a Point & Figure chart. This kind of chart dates back to the 1880s in the U.S. and could well have been used by Charles H. Dow. The chart...