We looked at the charts and indicators of GlaxoSmithKline (GSK) ADRs at the end of February but we can't ignore GSK today -- with our focus on the big components in the FTSE. GSK has retraced more than half of its August-December decline, so the bull has taken over -- what do we see next on the charts?
In this daily chart of GSK, below, we can see that prices are now firmly above the 200-day moving average line, and the 50-day moving average line has had a positive slope since early February.
A rising On-Balance-Volume (OBV) happens when there is more volume in a stock on days when it closes higher than when it closes lower. The OBV line on GSK has been moving steadily higher since early December, and this confirms and supports the price strength we have seen. The Moving Average Convergence Divergence (MACD) oscillator moved above the zero line at the beginning of the year, giving us an outright buy signal.
In this three-year weekly chart of GSK, above, we can see that every dip to and just below $38 has been bought over the past year and a half. Prices are above the just-now-rising 40-week moving average line. The weekly OBV line has moved up over the past four months and the MACD oscillator is crossing above the zero line. All bullish.
In this updated Point and Figure chart of GSK, above, we can see that the first entry of March with a "3" at $42. So $43 will be a double top and $44 will be a double-top breakout -- and allow us to project an upside price target of $57.
Bottom line: Traders can add to or initiate long positions in GSK at $43 and $44, risking below $41.