Burlington Stores (BURL) was reviewed back in November and I was careful writing that, "because the weekly bar chart of BURL shows what I believe is a top pattern I would be cautious about the long side of BURL." The bearish signals on the weekly chart were trumped by the daily chart turning up in November. With BURL some $40 higher another look at this retailer is in order.
In this daily bar chart of BURL, below, we can see that while BURL was below the 50-day and 200-day moving averages in October it is now clearly above both averages. The volume histogram right below the price chart is choppy and hard to read but the daily On-Balance-Volume (OBV) line has been in a clear uptrend and tells us that buyers of BURL have been more aggressive.
Back in late October the Moving Average Convergence Divergence (MACD) oscillator was about to cross below the zero line for a sell signal but it turned higher and has been above the zero for most of the past five months. The MACD oscillator has narrowed recently and may or may not cross to the downside depending on the future price action.
In this updated weekly bar chart of BURL, below, we can see now that the price and indicator setup in late October failed to generate a decline. Technical analysis (and fundamental analysis) is not perfect and I am okay with that - I don't mind missing the upside on some stocks as long as I sidestep devastating declines.
BURL is now back above the rising 40-week moving average line. The weekly OBV line stopped declining and turned higher to confirm the rally over the past six months. The weekly MACD oscillator has turned up to a new outright go long signal unlike the daily chart.
In this Point and Figure chart of BURL, below, we can see the fresh breakout at $133.94 (look for the "4" on the chart) and the upside price target of $154.
Bottom line: BURL could trade sideways in the $135-$140+ area in the near term before further gains to the $150-$154 area. Longs should raise sell stops to below $127.