KLA-Tencor Is Still Pointed Higher, but Lock in Gains

 | May 19, 2017 | 4:03 PM EDT
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We last looked at KLA-Tencor (KLAC) back in December and we gave an upside price target, "In this long-term Point and Figure chart of KLAC, ... we can see a recent consolidation pattern. A breakout to new highs could start KLAC on its way to an $115 price target."

KLAC has yet to reach our price target but right now it could be a matter of when and not if. A check of the charts and indicators seems appropriate today with prices within striking distance of making a new high.

In this daily chart of KLAC, below, we can see that the bulls are still in control. Prices are in a strong uptrend with relatively short and sideways corrections along the way. KLAC is above the rising 50-day moving average line and above the rising 200-day average line. The bullish golden cross of these two averages back in October was a good call. The daily On-Balance-Volume (OBV) is still climbing and while the Moving Average Convergence Divergence (MACD) oscillator is above the zero line it gave a take profits signal earlier this month.

In this weekly chart of KLAC, below, we can see that prices are above the rising 40-week moving average line. Compared to the earlier price action of KLAC it might be too far above the 40-week line. The weekly OBV line has been rising since late 2015 but it looks like it has leveled off the past one or two months. The weekly MACD oscillator is still very bullish.

In this Point and Figure chart of KLAC, below, we can see the $113 area as the next price target.

Bottom line: KLAC is still in an uptrend but a correction could develop considering its distance from the 40-week moving average line. Traders should raise their sell stops to a close below $96.

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