Some profit-taking ahead of the earnings. Technicals a little concerning for the near term

Taking a look at Accenture ahead of its earnings this week. Currently, its stock is trading at around $376.70 a share and we can see some profit-taking has been taking place over the last few weeks. Based on the weekly chart, the stock’s share price is up 8% YTD but as highlighted on the chart it still has room for more gains with all-time highs 11% away. However, there are some technical concerns for the near term with the MACD indicators looking like it could turn negative over the next couple of weeks. As seen in the past, when the MACD does turn negative the stock undergoes a retracement with the most recent one in October of last year. The move resulted in an 11% downfall. It is not guaranteed that a similar move may occur again as a positive earnings outcome could see the price continue to rise, overshadowing the technical bias. But, we can also see that earlier in the month the RSI was suggesting that the stock was a little overbought. Increasing the likelihood of a pullback lower. Hence, traders and investors should take some caution heading into the earnings. The resistance is now this year’s high of $388.29, a break above would boost momentum for an extension towards $400 a share. Support sits at $366.81, a break below would likely lead to a sell-off towards $358.99. Only a break of $358.99 could lead to a decline lower.