American Water Works (AWK) has been a big winner from the 2009 nadir but a recent consolidation phase allows us to present a higher price target from here. Check out these charts.
In this daily bar chart of AWK, below, we can see a shallow saucer-like bottom pattern from September. Prices made a rounded base around $72 and rallied over the top of the pattern in late February. In March prices corrected back to the neckline of the base pattern and they now look poised to resume their advance. AWK is above the rising 50-day moving average line and above the flattening 200-day moving average line.
The On-Balance-Volume (OBV) line looks like it has inched up from a November low which was also the price low. The Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in February for an outright go long signal.
In this weekly chart of AWK, below, we can see more of the impressive advance. AWK is above the flat 40-week moving average line. The weekly OBV line has been very strong and is close to a new high for the move up, leading the price action. The weekly MACD oscillator just crossed the zero line on the upside for an outright go long signal.
In this Point and Figure chart of AWK, below, we can see the consolidation in Xs and Os compared to the saucer bottom on the bar chart. The width of this consolidation when projected upward yields a potential price target in the $94 area.
Bottom line: Traders could probe the long side of AWK on a close above $78 if they can afford to risk a close below $74. Our upside price target is $94.