Shares of Action Alerts PLUS holding Walgreens Boots Alliance (WBA) have had a good rally from their February low, but stretched technical studies suggest some caution is warranted ahead.
In this daily chart of WBA, above, we can see that prices have rallied above the now rising 50-day moving average and above the 200-day line. Prices have moved up, but volume has not expanded to give us confidence in the trend. The On-Balance-Volume (OBV) line has been pretty flat since the February low. Another flattish indicator is the momentum study in the lower panel. Prices have made a few small cycles higher the past two months, but the momentum has diverged with only equal highs. Looking up at the price chart, putting aside the indicators for a second, we can see layers of resistance above $85.
This weekly chart of WBA, above, has mixed technical signals. Prices have finally rallied above the 40-week moving average line, but the slope of the line has not turned up yet. The OBV line has shown just slight improvement on this time frame, but certainly is not leading the price action with new highs or a breakout. The Moving Average Convergence Divergence (MACD) oscillator generated a cover shorts buy signal, but remains below the zero line and an outright go long signal. WBA could continue to work higher, but gains could be hard to achieve.