On September 19, 2018, we said that W.W. Grainger (GWW) had downside targets of $295.55, $209.30, & $123.05. By October 16, 2018, GWW had smashed through the conservative downside target of $295.55.
While the Speed Resistance Lines (SRL) are guides for downside risk, the Altimeter continues to provide the needed insight on where we are with GWW on a valuation basis.
By all indications, as shown in red on the Altimeter, GWW is at or near the “fair value” level. As can be seen in the chart, GWW is not unfamiliar with dramatic declines from the high end of the range down to the fair value level.
Speculators can attempt to buy at the fair value level in anticipation of a retest of the previous high. However, we’d be more inclined to buy the next low, or undervalued level, in the indicator.