Walgreens Boots Alliance, Inc. (WBA) was analyzed in the beginning of January where I wrote that, "If WBA closes below $69 we could see a retest of the October lows around $64 and a close above $78 -- the 200-day moving average line -- may be needed to turn the chart of WBA bullish." WBA did not break below $69 and recently rallied above the 200-day average. Now what?
In this daily bar chart of WBA, below, we can see that prices spent a few days above the declining 200-day line but recently retreated. WBA dipped to the rising 50-day line and could retest the 200-day line yet again. The daily On-Balance-Volume (OBV) has been strong the past three months and tells us in a simple line that buyers of WBA have been more aggressive. The Moving Average Convergence Divergence (MACD) recently crossed to the downside for a take profits sell signal. This sell could be reversed in the near-term if prices strengthen further.
In this weekly bar chart of WBA, below, we have a mixed picture. There is a long sideways trading range that eventually broke to the downside. Over the past few months prices have rallied back to the middle of that trading range or around $80. Prices retreated after this first test of resistance but this might not be the end of the rally. The weekly OBV line is very strong and we still have the MACD oscillator heading up towards the zero line.
In this Point and Figure chart of WBA, below, we have an upside price objective or target of $89.98 but we still see overhead resistance.
Bottom line: The rally from the late October low has been stronger than other rallies and suggests that the rally in WBA is not over just yet. Aggressive traders could probe the long side risking a close below $72. A close above $80 will strengthen the picture.