Charts Say Danaher Could Rally Some 50% From Here

 | May 03, 2018 | 5:18 PM EDT
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dhr

Danaher Corp. (DHR) looks poised for an upside breakout.

I last looked at DHR in February, suggesting at the time that "aggressive traders could go long above $105, risking below $99. The $145-$150 area is our upside price objective." Danaher hasn't yet broken out over $105 for an outright "Buy" signal on my charts, but everything else still looks bullish.

In this daily bar chart of the stock, we can see what could well be an "ascending triangle" (also known as a "rising triangle") that's been forming over the past three months:

DHR keeps finding supply (i.e. sellers) at around $104, while buyers have been more and more aggressive -- first buying at $92, then at around $95, then $96 and now at $98. An upside breakout should happen before prices get to the apex.

The stock's moving averages (the blue and gold lines in the top panel above) have positive slopes, while the On-Balance-Volume (OBV) line has been steady. The Moving Average Convergence Divergence oscillator (MACD) has crossed back and forth along the zero line, but could soon turn higher again.

In this weekly bar chart of DHR, we can see that prices are above the stock's rising 40-week moving-average line (in gold below):

The weekly OBV line is also solid on this time frame, while the MACD oscillator is poised for an upside/bullish crossover.

Lastly, this point-and-figure chart shows Danaher's prices creating a triangle formation:

A nearby price target of $106 is shown, but that will be good enough for a breakout in my opinion. The bottom line: Danaher looks primed and ready to go for an upside breakout. I said in my February analysis to go long above $105, but now I think investors can go long here and add above $105. And your risk point is now below $95, rather than my previous recommendation of below $99.

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