Cooper Cos. (COO) has been upgraded by TheStreet's Quant Ratings and this works nicely with a developing price base on the charts.
The price of COO has been under pressure the past year, declining to key support dating back to 2013 and early 2014. On this daily chart, above, we can see downside gaps in September and December as shares corrected lower. Downside gaps show that supply is more aggressive than demand and prices adjust sharply with a price void a.k.a. "gap." Prices have since rallied above the 50-day moving average line and the slope of this more sensitive line has turned up. Prices are currently testing the 200-day line, but momentum has been weakening.
Weaker price momentum tells us that a rally is slowing and this can mean that there is profit-taking or that resistance is capping gains. The On-Balance-Volume (OBV) line isn't showing much improvement in recent weeks.
In this weekly chart of COO, above, one can see the $140-$120 support area from 2013-2014. Prices have improved to test the declining 40-week moving average line in recent weeks. The Moving Average Convergence Divergence (MACD) oscillator generated a strong looking cover shorts signal but the OBV line on this timeframe is "bumping along" and not showing the strong rise we would like to see to confirm a price advance.
While I welcome the support from our quantitative team, the price chart of COO will probably need more basing before we can see sustained strength above the September and November highs.
