Veeva's Rally Looks Long in the Tooth

 | Jun 02, 2017 | 3:15 PM EDT
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We haven't written about Veeva Systems (VEEV) for some time now, but our outlook was correct: "The key event to watch is whether we can make a weekly close above $30. Traders and investors should go with this breakout if and when it occurs."

With hindsight we can see that prices did make a weekly close above $30 and has gone on to more than double from there. What's next?

In this updated daily bar chart, below, we can see that the uptrend in VEEV has been accelerating above $45 since the middle of March. Prices are above the rising 50-day moving average line and above the rising 200-day line. The daily On-Balance-Volume (OBV) line has been rising smoothly the past year to confirm and support the advance. The volume histogram right below the price chart does not really show a pattern of increasing volume since November. The daily Moving Average Convergence Divergence (MACD) oscillator is still in a bullish mode.

In this weekly bar chart of VEEV, below, we can see that prices are above the rising 40-week moving average line, maybe too far above it however. The weekly OBV line has risen to new highs along with prices and the weekly MACD oscillator is bullish.

In this adjusted Point and Figure chart of VEEV, below, we have a new upside price target in the mid-$80s.

Bottom line: Prices have risen quickly in the past few months and could be considered extended or overbought. I like to sleep at night so I would recommend raising sell stop protection to a close below $60.

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