Daily chart of Toyota stock for 5-7-2012

Toyota stock still trending lower despite RAV4 EV news

Toyota Motors (ADR: TM) may have announced pricing of its new RAV4 EV, but Toyota stock is still slumping along with the rest of the auto sector.

Many weeks ago I questioned when Toyota Motors (ADR: TM) stock would plow through the resistance level. That has now changed toward when a test of lower support levels will bring in buyers.

Fact is, the entire auto sector looks similar in their charts. All have peeked weeks ago and are now testing and breaking support levels. In the case of Toyota stock, the 150 day weighted moving average (WMA-150) is surely being tested; and the shorter WMA-50 has already been broken, while the slope of the average line has turned down and converging toward the WMA-150. No matter how you slice it, Toyota stock traders are not in a bullish mood.

Actually, the company behind the stock is fine. On the other hand, where TM was gapping upward for many months, that trend bias has now turned negative; and seems to be staying there.

Now, from a product viewpoint, Toyota looks to be in good shape, especially after its long recovery from last year when the earthquake and tsunami took its toll.

Right now TM is trading at 78.69 based on Monday’s close. One look at the daily chart, though and two elements really pop out. The first is the overhead resistance above the 85 level. The second is the WMA-150 (dark red line) at 77.67. However, look lower and you will see a large gap toward the next lower level of support, 68.64; which is really past broken resistance.

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