Retailer Zumiez (ZUMZ) is displaying a strong-looking base pattern on our weekly chart and a clear breakout level on the Point and Figure chart (both below). Bullish looking stocks with strong base patterns have been hard to find lately so let's check this one out.
In this daily bar chart of ZUMZ, below, we can see an uptrend in place from an August low. There is a bullish golden cross of the 50-day and 200-day moving averages in late October. The slope of the 200-day line turned up in late December and prices are still above both popular averages now. The daily On-Balance-Volume (OBV) line is easier to read than the volume histogram and shows a rise from June. A rising OBV line happens when buyers of a stock are more aggressive with more volume being transacted on days when the stock closes higher. The trend-following Moving Average Convergence Divergence (MACD) oscillator gave a buy signal in early September and another one this month as the indicator moved above the zero line.
In this weekly bar chart of ZUMZ, below, we can see a base going back to the middle of 2015. Prices are above the rising 40-week moving average line and the weekly OBV line is very bullish and close to breaking out to a new high. The weekly MACD oscillator is crossing to the upside again for a fresh outright go long signal. This weekly bar chart needs a close above $26.50, the peak of 2016, for a breakout.
In this Point and Figure chart of ZUMZ, below, a chart breakout happens at $25 and another breakout occurs at $27. A potential upside price target of $36.50 is shown.
Bottom line -- the charts are bullish so it is just a question of where we want to go long ZUMZ and what to risk. ZUMZ could dip to around $23 and traders might use that weakness to go long risking below $21. The $36-$38 is my target price.
