Cummins (CMI) has been a strong price performer since the beginning of 2016, making a V-like turnaround on the charts and doubling from its nadir. In the past twelve months, prices have made reassuring rallies and pullbacks, while the moving averages maintain positive slopes.
Let's check the latest charts and indicators to see if CMI can move above its early-2014 zenith and reach new all-time highs in the weeks ahead.
In this daily bar chart of CMI, below, we can see how prices have climbed from $105 in late June to over $160 earlier this month. As prices have risen, the 50-day simple moving average line has done a great job in tracking the rise. The slope of both the 50-day average and the 200-day average have been positive since July.
The daily On-Balance-Volume (OBV) line has been neutral for months, but does rise as prices turn higher. The daily Moving Average Convergence Divergence (MACD) oscillator is above the zero line in a bullish mode, but has narrowed towards a possible crossover and take-profits sell signal.
In this weekly chart of CMI, above, going back three years, we can see the V bottom and the doubling from the low. Prices are still above the rising 40-week moving average line, and the weekly OBV line has confirmed and supported the price gains. The weekly MACD oscillator is above the zero line, and looks poised for a bullish crossover to a fresh go-long signal.
In this Point and Figure chart of CMI, above, we can see that a trade at $163.43 will be a fresh upside breakout. Taking the last consolidation pattern and projecting it to the upside yields a price target in the $195 area.
Bottom line: CMI might trade sideways in the $154 to $161 area for a while longer, but fresh highs are likely in the weeks ahead. Traders could go long on a close above $161 and then risk below $152 looking for gains to the $195 area.