J.M. Smucker Co. (SJM) is certainly not a high-flying tech name that you would name-drop at a cocktail party, but it certainly has been a steady performer rewarding patient investors in recent years.
It is not hard to find the uptrend on this daily chart of SJM, above. SJM bottomed in July/August and turned up. It is now comfortably above the rising 50-day and 200-day moving averages. The On-Balance-Volume (OBV) line is relatively flat and does not indicate aggressive buying. The trend-following Moving Average Convergence Divergence (MACD) oscillator is about to generate a fresh buy signal.
Now, zero in on the price action from mid-January. Prices have been making higher lows since mid-January, while the $130 level has been capping gains. The rising price lows won on Friday as prices broke out over the $130 resistance line. Chartists call this pattern a bullish or ascending triangle formation. Prices move in a narrower and narrower trading range until they break out. Volume typically diminishes through the pattern and expands on the breakout.
Prices pulled back to retest the former resistance level at $130 this morning. Assuming this area reverses roles to become support, we should see the uptrend resume before long. The last low at $127 now becomes a key level.
This weekly chart of SJM, above, shows the uptrend that has propelled SJM higher the past two years. Prices are in a comfortable uptrend above the rising 40-week moving average line. The OBV line on this time frame has been a choppy sideways pattern, which does not really confirm the advance.
The MACD oscillator is in a bullish configuration on this time frame and suggests that the advance can continue. A close below $127, however, will spell a near-term reversal and could prompt some selling by recent longs. A close below $127 may break the rising 50-day moving average line and prompt additional technically driven selling.