Stanley Black & Decker (SWK) has traded higher and higher since the depths of 2009. Prices are still pointed higher, but a period of consolidation may be in order for the next several weeks.
Some of our indicators are suggesting that the pace of the advance could slow, and that may translate into some sideways price action like what we saw in the second half of 2016. Let's check on what's in the technical tool box.
In this daily chart of SWK, above, we can see the price action day by day going back 12 months. There was a sideways consolidation pattern from July to the end of December, and we could have another consolidation phase after the advance from $115 to near $140 in recent months.
Right now SWK is still above the rising 50-day moving average line. The 200-day moving average line was tested successfully in June, October and the end of December/beginning of January. This longer-term measure of trend is still bullish.
The daily On-Balance-Volume (OBV) line has been moving higher with the price action since the beginning of 2017, but it has leveled off the past six weeks. The 12-day momentum study shows a bearish divergence versus the price action since January. Prices have made higher highs, but the momentum readings have only made equal or lower highs. Momentum is a leading indicator, but it is not a great timing tool. SWK could keep rising in the weeks ahead, but a sideways move could develop.
In this weekly chart of SWK, above, we can see that prices are above the rising 40-week moving average line. The weekly OBV line has been positive for much of the past three years, but like the daily OBV line it too has leveled off in recent weeks. The trend-following MACD oscillator is still very bullish.
In this Point and Figure chart of SWK, above, we still have a longer-term price target of $162 for SWK, but we have no sense of timing. A decline to $128 would weaken this chart.
Bottom line: If you are long SWK from lower levels, that's super. I am not a bear on SWK, but I would suggest raising sell stops to a close below $128.