NIC Inc. (EGOV) is a digital government firm and it was upgraded today to "Buy" by TheStreet's quantitative service. This stock is not part of DJIA nor the S&P 500 so it is hardly a well-known name. Sometimes you can be pleasantly surprised by investments off the beaten path. Let's check and see if the charts and indicators support or confirm the quantitative buy rating.
In this daily bar chart of EGOV, below, we can see a decline from $25 in February to the $16 area by August. The pattern from late July to now looks like a base or bottom pattern to me. It looks like dips to and below $16 have been bought. Prices have crossed above the below the 50-day moving average line a number of times since September. This month prices have spent most of the time above the average line and its slope has turned positive. EGOV is still below the declining 200-day line but a close above $18 will break it. The On-Balance-Volume (OBV) shows a very bullish trend since August. A rising OBV line only happens when buyers are acting more aggressive and trade more stock when the security closes higher. The Moving Average Convergence Divergence (MACD) oscillator is hugging the zero line and should turn up to an outright go long signal if prices rally.
In this weekly chart of EGOV, below, we can see that prices are still below the declining 40-week moving average line but it will not take much of a rally to close above it. The weekly OBV line shows a rally since August taking the line to new highs. The weekly MACD oscillator signaled a cover shorts buy signal in September and is moving closer to the zero line.
In this Point and Figure chart of EGOV, below, we can see that a trade to $19.00 will be a small upside breakout and open the was for a possible rally to the $24.00 area.
Bottom line: Armed with a quantitative "Buy" signal, traders should consider buying strength above $18 and more above $19. Risk a close below $16.