Sanofi (SNY) has been trading sideways the past twelve months, but stronger price action since October has turned a neutral chart positive. Aggressive investors should buy an initial position now and increase holdings on strength.
In this one-year daily bar chart of SNY, below, we can divide the chart into two parts. The first part is from March through October. During this section of the chart, the slope of the 200-day moving average line is negative and prices spend more time below the 50-day moving average line than above it. The stronger part of the chart happens from late October until now. Prices rally above the 50-day and 200-day averages. The slope of the 50-day average is bullish and the 200-day average line flattens out.
The On-Balance-Volume (OBV) line behaves in a similar way, with an irregular decline until an October nadir and a rough improvement since. Ditto for the Moving Average Convergence Divergence (MACD) oscillator, which spends more time below the zero line until November.
In this three-year weekly chart of SNY, above, we can see a downtrend from late 2014 until early 2016. Since early 2016, the price of SNY has traded sideways. The slope of the 40-week moving average has changed from down to sideways -- and shows just a slight "uptick" now.
The weekly OBV line shows a rising trend over the past year -- different and more bullish than the daily OBV line. The MACD oscillator gave a cover-shorts buy signal in March and October, and just now moved above the zero line for an outright go-long signal.
In this Point and Figure chart of SNY, above, we can see the price action in a different way, filtering out small jiggles -- or noise. The sideways price pattern of 2016 can be seen from $37 to $42, and the recent entry on the chart at $43 is a breakout. Counting the columns across the base and projecting it upwards gives us a $51 potential price target.
Bottom line: SNY has become much stronger since late October. A gap below the market may not get filled, so traders and investors should look to buy SNY here and above $44, risking below $40.50. $51 is our upside price target.