I guess we knew it had to happen sooner or later. Warren Buffett, often considered the greatest fundamental investor of all time, announced over the weekend that at age 94, he’s finally stepping aside as CEO of Berkshire Hathaway 
BRK.A BRK.B .
What does Berkshire’s technical and fundamental analysis say as Buffett prepares to leave the conglomerate by year’s end?
Let’s check it out:
Buffett’s Departure and Berkshire Hathaway’s Fundamental Analysis
It’s worth noting that Buffett, who served as Berkshire’s CEO since 1970, will apparently stay on as the company’s chairman. But he’ll hand over the CEO role to Greg Abel, currently vice chair of Berkshire's non-insurance operations.
Buffett and late Berkshire Vice Chair Charlie Munger anointed Abel as the firm's eventual day-to-day chief executive in 2021. The incoming CEO will eventually have the final word on all operational issues and capital deployment.
Buffett, an investor that I’ve often tried to emulate, lost Munger -- his career-long friend and business partner -- at age 99 some 18 months ago. For decades, they reportedly talked everything over.
Buffett’s CEO job must have become more difficult and less fun without someone who served as both a sounding board and idea generator for more than half a century.
As for Berkshire stock, BRK.B shares were up 13.9% year to date and 27% over the past 12 months as I wrote this Thursday afternoon.
Shares have risen even though Berkshire reported seemingly underwhelming Q1 results Saturday at the company’s annual shareholder meeting (where Buffett also announced his retirement as CEO).
Berkshire posted $9.6 billion in operating earnings on $89.7 billion in revenue. Operating earnings actually fell year over year, while revenues contracted by 0.2%.
Net income attributable to Berkshire shareholders also sank by a gnarly looking 63.8% to $4.6 billion after accounting for such items as interest, taxes and non-operating income/expenses. Meanwhile, total costs and expenses increased by 2.3% to $78.268 billion.
What happened?
Well, the firm's investment portfolio -- which has long been Buffett's forte -- really took its toll on performance during Berkshire’s latest quarter.
Investment results dropped from a $1.9 billion gain in the year-ago quarter to (wait for it) a $6.4 billion loss in the latest period. Yikes!
However, Buffett has long said that Berkshire invests not to perform well over one quarter, but to do so over decades.
Berkshire Hathaway’s Technical Analysis
Now let’s look at BRK.B’s chart going back some 2-1/2 months through Wednesday (May 7):
Readers will first see a so-called “double top” pattern of bearish reversal, as denoted by the two red boxes marked “Top 1” and “Top 2.” That pattern set up very accurately in time for last Saturday's shareholder meeting.
BRK.B has also recently given back its 21-day Exponential Moving Average (or “EMA,” marked with a green line above). That probably turned some swing traders against the name.
However, there’s been a genuine fight around the stock's 50-day Simple Moving Average -- or “SMA,” as marked with a blue line above. That likely has portfolio managers exhibiting some uncertainty about the stock.
Should BRK.B fall below the 50-day SMA, portfolio chiefs will potentially face pressure from their risk managers to reduce long-side exposure to the stock.
Readers will also note that Berkshire rebounded off of its 200-day SMA (marked with a red line at $462) in early April. That’s not a downside target for the stock, but rather a downside pivot that could indeed signal even lower prices to come.
Meanwhile, BRK.B’s Relative Strength Index (the gray line at the chart’s top) is currently neutral, but that’s not the case with the stock’s daily Moving Average Convergence Divergence indicator.
The MACD -- marked with gold and black lines and blue bars at the chart’s bottom -- had been in decent shape, but that’s recently changed.
First, the histogram of Berkshire’s 9-day EMA (marked with blue bars) recently flipped from positive to negative. That’s typically a bearish sign.
At the same time, the stock’s 12-day EMA (black line) has crossed below its 26-day EMA (gold line). Both are still above zero, but many investors view having a stock’s 12-day line below its 26-day one as sub-optimal.
What might happen from here? A lot will depend on how Berkshire performs during the current quarter.
We know that many of its investments have come back recently in value, and it would certainly be rough to see Buffett -- one of Wall Street’s all-time greats -- ride off into sunset in a less-than-graceful fashion.
But for now, Berkshire’s chart doesn’t look especially bullish to me.
(Moomoo Technologies Inc. Markets Commentator Stephen “Sarge” Guilfoyle had no position in BRK.A or BRK.B at the time of writing this column.)
This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. Moomoo and its affiliates make no representation or warranty as to the article's adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.
TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third-party platform.
BRK.A BRK.B .What does Berkshire’s technical and fundamental analysis say as Buffett prepares to leave the conglomerate by year’s end?
Let’s check it out:
Buffett’s Departure and Berkshire Hathaway’s Fundamental Analysis
It’s worth noting that Buffett, who served as Berkshire’s CEO since 1970, will apparently stay on as the company’s chairman. But he’ll hand over the CEO role to Greg Abel, currently vice chair of Berkshire's non-insurance operations.
Buffett and late Berkshire Vice Chair Charlie Munger anointed Abel as the firm's eventual day-to-day chief executive in 2021. The incoming CEO will eventually have the final word on all operational issues and capital deployment.
Buffett, an investor that I’ve often tried to emulate, lost Munger -- his career-long friend and business partner -- at age 99 some 18 months ago. For decades, they reportedly talked everything over.
Buffett’s CEO job must have become more difficult and less fun without someone who served as both a sounding board and idea generator for more than half a century.
As for Berkshire stock, BRK.B shares were up 13.9% year to date and 27% over the past 12 months as I wrote this Thursday afternoon.
Shares have risen even though Berkshire reported seemingly underwhelming Q1 results Saturday at the company’s annual shareholder meeting (where Buffett also announced his retirement as CEO).
Berkshire posted $9.6 billion in operating earnings on $89.7 billion in revenue. Operating earnings actually fell year over year, while revenues contracted by 0.2%.
Net income attributable to Berkshire shareholders also sank by a gnarly looking 63.8% to $4.6 billion after accounting for such items as interest, taxes and non-operating income/expenses. Meanwhile, total costs and expenses increased by 2.3% to $78.268 billion.
What happened?
Well, the firm's investment portfolio -- which has long been Buffett's forte -- really took its toll on performance during Berkshire’s latest quarter.
Investment results dropped from a $1.9 billion gain in the year-ago quarter to (wait for it) a $6.4 billion loss in the latest period. Yikes!
However, Buffett has long said that Berkshire invests not to perform well over one quarter, but to do so over decades.
Berkshire Hathaway’s Technical Analysis
Now let’s look at BRK.B’s chart going back some 2-1/2 months through Wednesday (May 7):
Readers will first see a so-called “double top” pattern of bearish reversal, as denoted by the two red boxes marked “Top 1” and “Top 2.” That pattern set up very accurately in time for last Saturday's shareholder meeting.
BRK.B has also recently given back its 21-day Exponential Moving Average (or “EMA,” marked with a green line above). That probably turned some swing traders against the name.
However, there’s been a genuine fight around the stock's 50-day Simple Moving Average -- or “SMA,” as marked with a blue line above. That likely has portfolio managers exhibiting some uncertainty about the stock.
Should BRK.B fall below the 50-day SMA, portfolio chiefs will potentially face pressure from their risk managers to reduce long-side exposure to the stock.
Readers will also note that Berkshire rebounded off of its 200-day SMA (marked with a red line at $462) in early April. That’s not a downside target for the stock, but rather a downside pivot that could indeed signal even lower prices to come.
Meanwhile, BRK.B’s Relative Strength Index (the gray line at the chart’s top) is currently neutral, but that’s not the case with the stock’s daily Moving Average Convergence Divergence indicator.
The MACD -- marked with gold and black lines and blue bars at the chart’s bottom -- had been in decent shape, but that’s recently changed.
First, the histogram of Berkshire’s 9-day EMA (marked with blue bars) recently flipped from positive to negative. That’s typically a bearish sign.
At the same time, the stock’s 12-day EMA (black line) has crossed below its 26-day EMA (gold line). Both are still above zero, but many investors view having a stock’s 12-day line below its 26-day one as sub-optimal.
What might happen from here? A lot will depend on how Berkshire performs during the current quarter.
We know that many of its investments have come back recently in value, and it would certainly be rough to see Buffett -- one of Wall Street’s all-time greats -- ride off into sunset in a less-than-graceful fashion.
But for now, Berkshire’s chart doesn’t look especially bullish to me.
(Moomoo Technologies Inc. Markets Commentator Stephen “Sarge” Guilfoyle had no position in BRK.A or BRK.B at the time of writing this column.)
This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. Moomoo and its affiliates make no representation or warranty as to the article's adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.
TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third-party platform.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.