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SHW — Oversold Bullish Reversal
Status: Invalidated
Scanner score: 20.0/100
Why this was flagged
SHW was identified as a bullish technical setup based on the Oversold Bullish Reversal pattern. The scanner found a score of 20.0/100 using trend alignment, momentum, price action, volume, and risk-management rules. Monitor update: Latest daily-chart analysis no longer reports a bullish long setup.
Trade framework
Position-sizing example
These examples use the distance between the reference entry and stop-loss. They do not account for commissions, slippage, taxes, overnight gaps, or your personal account size.
Exit plan
- Stop-loss: Exit if the stop-loss is reached. Do not move the stop farther away to avoid taking the planned loss.
- Target 1: Consider taking partial profit when Target 1 is reached and reducing risk on the remaining shares.
- Target 2 or trailing exit: Consider closing the remaining position at Target 2, or use a disciplined trailing stop only if the trend remains strong.
- Time exit: Reassess or close a trade that fails to progress within the suggested holding window.
Technical chart
Daily closing price with moving averages and planned trade levels. This chart is a screening aid, not a guarantee of future results.
$1,000 educational outcome examples
These examples use a $1,000 position and fractional shares at the midpoint of the entry zone. Actual results can differ because of market gaps, fills, spreads, commissions, taxes, slippage, and changing conditions.
Easy explanation for new investors
The scanner found Sherwin-Williams Company (SHW) using a pattern called an Oversold Bullish Reversal. This means the price dropped quickly, and the Relative Strength Index (RSI) is at 28.8. RSI is a tool used to see if a stock has been sold too much. When the RSI is low, it can suggest the selling might be finishing. The scanner gave this setup a score of 20 out of 100.
What the price plan means
The entry zone is between $317.51 and $319.86. If you enter here, there are two target prices where the stock might go: $345.72 and $359.83. To manage risk, a stop-loss price of $303.40 is set. This is a price point used to exit the trade if the stock moves in the wrong direction. The reward-to-risk ratio is 2, which compares the potential gain to the potential loss.
What could make the idea fail
The setup might not work if the stock continues to drop below the stop-loss price of $303.40. Also, the relative volume is 0.84, which means there is less trading activity than usual. Lower volume can mean there is not enough interest to push the price up.
Important reminder
This information is for educational purposes only and does not tell you what to do with your money.
Recent news context
This automated review is separate from the technical score. It summarizes recent related articles and does not predict price movement.
Overall context: Caution (High confidence)
Sherwin-Williams (SHW) presents a mixed valuation profile. While Discounted Cash Flow models suggest the stock may be undervalued by approximately 11.8%, its P/E ratio of 30x is higher than both the industry average and fair P/E estimates, indicating it is priced at a premium relative to earnings. The company affirmed a quarterly dividend of $0.80 per share payable in September 2026. Analysts have provided varying price targets, with some suggesting significant upside. However, recent sector-wide selling in specialty chemicals suggests broader macroeconomic headwinds or demand concerns may be impacting the industry.
Potentially supportive context
- Affirmed quarterly dividend of $0.80 per share payable September 11, 2026.
- Discounted Cash Flow (DCF) models suggest potential undervaluation based on free cash flow generation.
- Analyst consensus price targets indicate potential upside from current levels.
Risks and caution items
- P/E ratio of 30x is above the industry average and fair P/E estimates.
- Recent synchronized selling in the specialty chemicals sector suggests broader market or demand risks.
- Uneven demand reported in core markets.
- Valuation appears expensive when viewed through traditional earnings multiples.
Latest reviewed article: Jul 26, 2026 8:27 am
Recent related articles
Sherwin-Williams (SHW) recently affirmed a quarterly dividend of US$0.80 per share, payable on September 11, 2026. This announcement, coupled with increasing analyst optimism ahead of late-July earnings, is drawing attention to how the company's premium valuation aligns with earnings expectations amidst uneven…
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Important: Some returned articles may describe competitors, industry conditions, or related companies. Open the source before relying on an article.
Scanner confirmations
- RSI is near oversold territory with bullish candle confirmation.