Emerson Electric (EMR) turned on the juice in November with prices rallying to levels not seen since 2015. Our favorite technical studies seem to be in good shape and capable of supporting further gains in the weeks and months ahead.
In this one-year daily chart of EMR, below, we can see that prices traded sideways between $48 and $57 for several months before post-election strength became more noticeable. During the sideways trading from March through October it is hard to see if there is any meaningful accumulation with the On-Balance-Volume (OBV) moving up and down with the price action.
In November, the price action turns stronger with EMR rallying above the rising 50-day and 200-day moving averages. The Moving Average Convergence Divergence (MACD) oscillator turns up above the zero line in November for an outright go long signal. The MACD oscillator has narrowed in recent days giving us a liquidate longs sell signal. EMR might pull back to fill a gap down to $60 but I would split the difference and look to be a buyer around $61.
In this three-year weekly chart of EMR, below, we can see that prices are above the rising 40-week moving average line. The weekly OBV line looks much more positive than the daily line. The weekly MACD oscillator has been above the zero line for much of the past year and is currently in a strong configuration.
This Point and Figure chart of EMR, below, shows that a trade at $64 will be an important breakout and could open up the stock for a potential longer-term price objective of $91.
Bottom line: EMR might pull back a little more and that dip should be a buying opportunity. Risk below $58 for now.
