United Rentals Looks Good for the Long Haul

 | Mar 10, 2017 | 10:04 AM EST
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uri

United Rentals (URI) has been on a tear since the 2009 nadir, but the big questions today are whether there is more upside to come and what parameters we would need to be aware of in order to profit. Let's check out, rent or even buy the latest charts and indicators.

In this one-year daily bar chart of URI, below, we can see a strong rally since the election. There is a breakaway gap to the upside in November and another strong gap in the latter part of January. URI is above the rising 50-day moving average line, and it looks like there was a successful test of the line yesterday. The 200-day moving average line has a positive slope, and we can see a bullish golden cross of the 50-day and 200-day averages back in June.

The On-Balance-Volume (OBV) line shows an upward trend over the past year, and has leveled off with the recent sideways price action. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been above the zero line for much of the past year, but is currently pointed down in "take profits" mode.

In this weekly chart of URI, above, going back three years, we can see a great looking bottom formation from July 2015 through October 2016. The "head" of this formation is near $40 at the beginning of 2016. Prices are above the rising 40-week moving average line, and the On-Balance-Volume line bottomed in the month before the price low and has moved higher since then, telling us there has been good accumulation for more than a year.

The MACD oscillator is above the zero line, but the two averages that make up this indicator have begun to narrow -- and could, depending on the price action, cross to a liquidate-longs sell signal.

In this Point and Figure chart of URI, above, we can see a durable uptrend. The most recent price action shows a column of "Os" signaling a decline. A move below $120 could precipitate further declines.

Bottom line: URI could make further tests of the rising 50-day moving average line and it could fill the gap down to $115 in the days ahead. If support in the $115 to $110 area holds, I would suggest probing the long side of URI, risking below $105.

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