TheStreet's Jim Cramer talked about the cloud companies Saturday at an investor boot camp in Manhattan. Maybe you were lucky enough to be there. Jim talked about the fundamental backdrop.
(See: Inside TheStreet's "Investor Boot Camp" Conference)
Adobe Systems Inc. (ADBE) was one of the companies mentioned, I reviewed it in the beginning of March, and I summed the charts up this way - "Some signals on the daily and the weekly chart of ADBE suggest that prices could pause or correct before we see further gains. Maybe a correction down to $190 or so before new highs are seen. Traders may want to raise stop protection to around $188 -- below the 50-day line and investors may want to use a stop below the February low of $180."
With the benefit of two months of hindsight we can see (first chart, below) that ADBE traded sideways with higher lows the past two months. This has been a pause in the uptrend and the price action on ADBE has been stronger than the broad market. With prices right up against the highs around $230, a fresh look at the charts is in order today.
In this daily bar chart of ADBE, below, we can see that prices have been in a strong uptrend the past 12 months. Prices have bounced off the rising 50-day simple moving average line in February, late March and late April.
The daily On-Balance-Volume (OBV) shows a rising trend from last May into March and then some softness the past six weeks. Hopefully the OBV line makes a new high with the price action.
The trend-following Moving Average Convergence Divergence (MACD) oscillator has been above the zero line for much of the past year and is now close to a bullish crossover to the upside. This would be a fresh outright go long signal.
In this weekly bar chart of ADBE, below, we can see that prices are above the rising 40-week moving average line, perhaps too far above the line.
The weekly OBV line has been going up since December 2016 and shows strong accumulation.
The weekly MACD oscillator has been in a bullish mode the past three years. The oscillator has narrowed recently but strong price action in the weeks ahead could turn this indicator up again.
In this Point and Figure chart of ADBE, below, we can see a long uptrend. The price action suggests a potential upside price target of $283 but we also need to recognize that a decline to $204 would be bearish.
Bottom line: After two months of sideways price action, ADBE looks poised for an upside breakout to new highs. Traders could go long above $232 risking below $210. Investors should risk below $204. The $260 area and then the $283 area are my upside price targets.