Splunk (SPLK) is getting ready for another rally attempt. It stopped short of $66 last August and it was unable to sustain above $66 in February. Prices made a small correction this month and may now be in position for an upside move and potential breakout.
In this daily chart of SPLK, below, we can see that prices are testing the rising 50-day moving average line and remain above the rising 200-day moving average. The On-Balance-Volume (OBV) line rose from a May low to a February high. The OBV line dipped a little into March but it looks like it is moving higher again signaling more aggressive buying again. In March, SPLK has made equal lows in price at $60 but the momentum study has made higher lows for a bullish divergence. It was harder for SPLK to decline to $60 the second time. A slowing momentum study in a downtrend is a sign of scale down buying.
In this weekly chart of SPLK, below, going back three years we can see that prices are above the rising 40-week moving average line. The weekly OBV line is positive and the MACD oscillator is above the zero line in bullish configuration.
Bottom line: Aggressive traders could go long SPLK on strength above $63 looking to buy more on a close above $66. A sell stop at $59 seems appropriate.