Sherwin-Williams’ (SHW) stock price has been in an uptrend since the end of March, rising from the support level of $208. The stock price witnessed a strong surge and successfully formed an annual high of $283.80. The paints and coating giant is committed to boosting its retail business and is benefitting from robust domestic demand.
The stock price faced strong rejection above $280 due to the strong presence of bears. SHW stock price slid and corrected the bullish move. Recently, Sherwin-Williams’ stock price formed a support of $264.50 and commenced a bullish rally, hoping to retest the annual high.
The move was halted as the price reached nearly $275 and retraced back to the support. On the last trading day (15 September), the stock price broke the recent support of $264.50 and is headed toward the next critical support level of $255. SHW stock price witnessed a fall of 2.40% on 15 September.
If bulls enter the market and SHW stock price can form support at $260, it might retest at $275. On the other hand, if the next candle breaks the previous candle’s low, SHW stock might melt toward $255.
Why Did Sherwin Williams Stock Witness a Rise?
The Paint Stores Group division of Sherwin-Williams is witnessing a rise in architectural sales volume. The sales were up 6.3% by an MSD architectural volume increase; a strong indication that the company has invested in capturing a more significant percentage of its end market is the rising number of retail locations.
In 2022, the paints and coatings giant added 72 new stores, and 80 to 100 more are expected to open in the United States and Canada the following year. In the first quarter of 2023, four new stores were added.
Sherwin-Williams’ cost-cutting initiatives, working capital reductions, supply chain optimization, and productivity enhancement resulted in a margin increase. It expects to save between $50 Million to $70 Million each year, 75% of which can be realized by the end of 2023.
Will SHW Stock Fall to $255?
The stock price fell below the 20 and 50-day exponential moving average, indicating a rise in participation of bears. Chaikin money flow score hovers below the 0 mark and currently stands at -0.04, suggesting slight weakness in the market.
The relative strength index is also in a downtrend and stands at 37.41, nearing the oversold zone, implying a strong confluence of bears over the market.
Conclusion
SHW stock is a longtime outperformer and has historically traded at a premium. It is currently valued at a price-to-earnings ratio of 29.4. SHW stock price needs to form strong support and rise above $275 for retesting annual high.
Technical Levels
Major support: $255 and $243.50
Major resistance: $275 and $255
