American Water Works (AWK) made a steep correction to the downside in January and early February, but prices have since recovered and look like they are on surer footing now. Let's roll the dice and take a look at the charts and indicators.
(See AWK in Jim Cramer's "Mad Money" Lighting Round)
In this daily bar chart of AWK, below, we can see a strong and supported rally from May to December. Prices were above the rising 50-day moving average line most of the time and the rising 200-day line.
The daily On-Balance-Volume (OBV) line rises from May to December and only makes a modest two month pullback before firming again. This OBV action tells me that despite the sharp price decline the buyers of AWK largely stayed with those positions.
The trend-following Moving Average Convergence Divergence (MACD) oscillator went to a sell in early January when it fell below the zero line but it is now back above it in a bullish mode.
In this weekly bar chart of AWK, below, we can see that prices spent a number of weeks below the rising 40-week moving average line this year similar to what happened in late 2016. The weekly OBV line hardly dipped and the weekly MACD oscillator is close to a cover shorts buy signal.
In this Point and Figure chart of AWK, below, we can see an upside price target of $87.58 being projected. This is not a new high but it is a start. A decline below $78.26 would be bearish.
Bottom line: I don't expect to see AWK roar higher to erase the losses of earlier this year, but rather I envision a sideways to higher trading period between $83 and $90 before an attempt at new highs.