We have been attracted to the positive price action in Campbell Soup (CPB) since Nov. 11, when we discussed it in our story "Campbell Soup Still Warming Up, Despite Recent Pullback." We liked it again on November 23: "Things Are Heating Up for Campbell Soup. A close above $52 is needed for a more exciting breakout."
CPB broke out above $52 in December, but dipped in early January as the broad market slumped. See the chart, above. After the slight hesitation in early January, CPB found its footing and rallied about $10 -- impressive. Prices are nicely above the rising 50-day and 200-day moving averages. The Moving Average Convergence Divergence (MACD) oscillator is bullish and the On-Balance-Volume (OBV) line is confirming the rally, with volume expanding in the direction of the trend.
This longer-term chart of CPB, above, is also positive. Prices of CPB are comfortably above the rising 40-week moving average. The OBV line is pointed up on this longer time frame and the MACD oscillator is bullish. How high can CPB rally? A point and figure chart (not shown) can give us a "count" or price target around $86. However, a doubling of the consolidation around the $45 level would suggest $90 as a long-term target. With this recent price strength, traders should consider raising their stop loss orders to their entry price.