Like many energy names National Oilwell Varco (NOV) suffered a significant decline the past two years, but prices have been bottoming.
(Read James Passeri's article on National Oilwell Varco and GE here.)
In this daily chart of NOV, above, we can see some of the decline, but that is old news. The new news is that prices have traded sideways so far this year. Prices have been above and below and now above the 50-day moving average line. The On-Balance-Volume (OBV) line has mirrored the price action to date.
The two lines of the Moving Average Convergence Divergence (MACD) oscillator crossed over with a cover shorts buy signal and both lines are moving up to the zero line for an outright buy signal. Strength above $35 will put NOV above its March highs for a breakout from this bottom formation.
In this long-term weekly chart of NOV, above, we have a couple of developments worth noting. While prices are still below the declining 40-week moving average line they are getting closer to a cross. The OBV line on this time frame has yet to really improve but buyers of NOV may be able to build a position without pushing prices up.
In the lower panel we can see a one-year bullish divergence between the lower prices and higher momentum readings -- the rate of decline has been slowing and slowing. Traders could go long NOV at current levels and available weakness using a sell stop below $27.50 for now. Add to positions on a close above $35.