Mastercard Inc. (MA) was put under our "technical microscope" in October, when I wrote, "We find no sell signals on the charts of MA, but prices are extended so it never hurts to adjust your stop-loss parameters. I would suggest a close below $135 as a new risk point."
Looking over our updated charts this morning, we can see a late November/early December pullback that stopped short of our stop loss point below $135. From the early December low, prices have soared another $25. A fresh look at MA seems in order.
Mastercard is one of the financial stocks that Jim Cramer mentions in his article about the three sectors that are driving up the markets, published Monday morning.
In this daily bar chart of MA, below, we can see that the price of MA is above the rising 50-day moving average line and the rising 200-day line. The daily On-Balance-Volume (OBV) line is still strong and rising -- just as it was back in October. The trend-following Moving Average Convergence Divergence (MACD) oscillator is in a strong uptrend.
In this weekly bar chart of MA, below, we can see that prices are above the rising 40-week moving average line. The weekly OBV line has been edging higher since July 2016 and is still bullish. The MACD oscillator just crossed back to an uptrend and a new outright go long signal.
In this Point and Figure chart of MA, below, we can see a consolidation pattern from October (look for the "A" on the chart). A tentative price target of $219 is shown.
Bottom line: MA has made a big move up the past year, but sell signals are not present. Prices are on the stretched side, so I would be on alert for a possible sideways correction. Investors could consider raising sell stop protection to a close below $140.