Terex Corp. (TEX) is looking bullish today with a quantitative upgrade to buy. TEX was upgraded by TheStreet's Quant Ratings service but as regular readers of Real Money and Kamich's Korner you know that I like to combine a fundamental or quantitative buy (or sell) with the appropriate charts and technical indicators. No investment approach is right all the time so a combination of methods can be more effective.
In this daily bar chart of TEX, below, we can see that our lagging indicators -- moving averages -- are still bearish, but our leading indicator -- price momentum -- is bullish. Let's look closer.
TEX is below the declining 50-day moving average line and below the cresting 200-day line. TEX closed above the 50-day line last month but was unable to sustain those gains. Prices show a small double-bottom pattern around $36 with lows made in late March and early April and the retest in late April.
The volume of trading in April was less than what was seen in February and early March so it looks like the selling dried up in April. The daily On-Balance-Volume (OBV) line looks like it bottomed in March and started to improve signaling more aggressive buying. The 12-day momentum study is leading the way to higher prices, I believe, with a bullish divergence from February to April --momentum made higher lows when prices were making lower lows.
In this weekly bar chart of TEX, below, we can see that prices are below the cresting 40-week moving average line. The weekly OBV line looks like it made a low in March and the trend-following Moving Average Convergence Divergence (MACD) oscillator is narrowing toward a future cover shorts buy signal.
In this Point and Figure chart of TEX, below, we can see an upside price target of near $47 - $46.91.
Bottom line: Aggressive traders could go long TEX on a close above $40 risking below $36. The $47-$48 area is my price target.