Emerson Electric Likely to Trade Sideways

 | Jan 19, 2018 | 11:18 AM EST
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We reviewed Emerson Electric (EMR)  recently, where I gave this counsel -- "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." It has not been a long time but some of our indicators have shifted a little so a fresh look is a good idea.

In this daily bar chart of EMR, below, we can see that EMR is now farther than before from the rising 50-day moving average line and the bullish 200-day line. The On-Balance-Volume (OBV) line looks a little stalled in recent days. The overall trend of the OBV is bullish so a few days of stalling should not be anything to worry about. The Moving Average Convergence Divergence (MACD) oscillator has just crossed to the downside for a take profits sell signal.

In this weekly bar chart of EMR, below, we can see that prices are still above the rising 40-week moving average line. The price bar for this current week looks like it will be an "inside week" or when the high/low range this week is tighter and inside the high/low range of the prior week. Sensitive futures traders will pay attention to this kind of signal as it can represent a "near reversal" or it is a sign that the upward momentum of the market is slowing. The weekly OBV line shows a minor down tick while the MACD oscillator is still bullish.

In this Point and Figure chart of EMR, below, we can see a possible longer-term price target of $89.00.

Bottom line -- EMR might trade sideways in the near-term. Longs should consider raising sell stop protection to a close below $68 now. Our higher price targets could still be reached in the months ahead.

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