Ericsson (ERIC) has rallied nicely since September but the bigger picture suggests a more important bullish trend is under way. Let's check out our usual array of charts and indicators.
In this daily bar chart of ERIC, below, we can see a rally from last January to early July and then a large downside gap. Prices continued lower into a September nadir but a fresh advance began. ERIC has nearly filled the summer gap and the moving averages are in a bullish position. ERIC is has been above the rising 50-day moving average line since late October and the 50-day line is close to crossing above the rising 200-day line. This pending crossover is often called a golden cross and generally viewed as a bullish signal.
Look at the movement of the On-Balance-Volume (OBV) line, which barely dips in July with the gap and has been steady the past five months. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been above the zero line since October and is turning up for a fresh outright go long signal.
In this weekly bar chart of ERIC, below, we can see that prices are above the flat to rising 40-week moving average line. Prices are still up from their November 2016 low of around $5 and the pattern since then looks like a base. The weekly OBV line has been improving from its November 2016 low and looks like it is leading the price action as it is close to making a new high for the move up. The weekly MACD oscillator is just about to move above the zero line for an outright go long signal on this time frame.
In this weekly Point and Figure chart of ERIC, below, we can see an upside price target of $7.67, which if reached would be an important upside breakout.
Bottom line: Aggressive traders could approach ERIC from the long side risking below $6.25. A breakout above $7.50 would be a really bullish event should it materialize in the weeks ahead.