Emerson Electric Co. (EMR) was reviewed two months ago and we liked the technical set-up writing,"the longer-term charts of EMR are bullish so if the stock pulls back and holds above support this could be a buying opportunity."
As it turns out EMR pulled back a bit more that I would have liked but it still held support. Prices turned around quickly in mid-November and have been very strong since then. Let's review the latest charts and indicators to see if we should buy-hold-or-sell.
In this daily bar chart of EMR, below, we can see a sharp decline in early November followed by an equally sharp rise the past six to seven weeks. EMR broke below the 50-day and 200-day moving averages in early November but managed to close back above both averages by the end of the month. The On-Balance-Volume (OBV) line turned up in November and has been making new highs for most of December. The Moving Average Convergence Divergence (MACD) oscillator is pointed up in a bullish mode.
In this weekly bar chart of EMR, below, we can see that EMR is above the rising 40-week moving average line. The weekly OBV line has turned up since November and the MACD oscillator gave a fresh go long signal.
In this Point and Figure chart of EMR, below, we can see the fresh breakout at $67.45 and the longer-term price target of $87.40.
Bottom line: EMR has moved up sharply so some sideways consolidation would not be unusual and traders could use any sideways price action as a chance to add to long positions. The mid-$80's is our new price target and traders should probably risk a close below $66.
