Linde Outlook - Bearish Technicals and Mixed Analyst Sentiment

Market Snapshot

Takeaway: While Linde (LIN) showed a recent price rise of 0.55%, the technical outlook remains bearish with a internal diagnostic score (0-10) of 3.46, suggesting caution for new investors.

News Highlights

1. US Vaccination Policy Shifts: Recent news about changes to US vaccine policies could have indirect effects on global supply chains and industrial demand, potentially affecting Linde’s industrial gas operations.

2. Trump's Tariff Actions: President Trump’s continued aggressive tariff policies are generating uncertainty in global trade, with potential ripple effects on Linde’s international operations and supply costs.

3. China’s Sluggish Manufacturing: China’s PMI dipped slightly to 49.5 in May, signaling continued contraction in factory activity. This could impact Linde’s business in Asia, where demand for industrial gases remains a key growth driver.

Analyst Views & Fundamentals

Analyst sentiment for Linde is mixed. The simple average rating stands at 4.00, while the historical performance-weighted rating is 2.77, indicating some dispersion in expectations.

JP Morgan’s recent "Buy" rating from Jeffrey J Zekauskas has a 100% historical win rate based on one past prediction. However, this positive view contrasts with the technical analysis, which suggests a weak trend.

On the fundamentals, key factors show the following values and internal diagnostic scores (0-10):

• Net cash flow from operating activities per share (YoY growth rate): 14.66% (score: 1.00)
• Quick ratio: 78.19% (score: 3.00)
• Net cash flow from operating activities (YoY growth rate): 12.59% (score: 2.00)
• Total profit / EBIT: 97.31% (score: 3.00)
• Cash-UP: 16.84% (score: 3.00)
• Cost of sales ratio: 51.29% (score: 1.00)
• Current ratio: 92.61% (score: 2.00)

Overall, while some liquidity metrics look strong, earnings-related indicators and cost efficiency remain areas of concern.

Money-Flow Trends

Fund-flow data shows a relatively strong inflow into Linde. The overall inflow ratio is 64.84%, with large and extra-large investors contributing positively. The internal diagnostic score (0-10) for fund flows is an excellent 8.24, indicating that big-money players are still accumulating shares despite the technical headwinds.

Key Technical Signals

Recent technical indicators for Linde show a mix of signals:

• WR Overbought: Score of 1.52. Internal signal suggests neutral bias.
• MACD Golden Cross: Score of 2.63. Slightly bearish, with a historical win rate of 44.44%.
• WR Oversold: Score of 3.74. Suggests a neutral rise in price potential.
• Bullish Engulfing: Score of 5.33. Positive pattern, though the broader trend remains unclear.
• Ex-Dividend Date: Score of 3.76. Neutral impact with a win rate of 50%.

On recent dates, key signals included:

• Sep 12: WR Overbought, MACD Golden Cross
• Sep 11: WR Overbought
• Sep 03: WR Oversold
• Sep 05: WR Oversold
• Sep 04: Ex-Dividend Date, Bullish Engulfing, Dividend Record Date

Despite a few positive candlestick patterns like the Bullish Engulfing, the overall technical outlook remains bearish with 5 negative vs. 0 bullish signals over the last five days. The trend is considered weak and volatile, with no clear direction.

Conclusion

Given the internal diagnostic technical score (0-10) of 3.46, it is advisable for investors to consider waiting for a clearer trend or a pull-back before entering. While fundamentals remain stable and fund flows are strong, the current technical landscape is not favorable for aggressive buying. Watch for any earnings surprises or positive earnings revisions as potential turning points in the near term.