Carlyle Group (CG) has outlined a base pattern for the past year, and in late April prices broke out on the upside. CG retreated in recent days and, with prices retesting the breakout area it looks like a good place to do some buying.
Let's examine our daily, weekly and Point and Figure charts to get more details.
In this daily bar chart of CG, above, we can see a rounded bottom-like formation. There is a "neckline" to the pattern across the $17.50 level. Prices are stronger on the right half of the pattern, which is typical. In April, before the breakout, CG rallied above the now rising 50-day and 200-day moving average lines.
The daily On-Balance-Volume (OBV) line has a temporary rise in January, but a more sustained rise from early March. This month, the OBV line made a new high above the January high. The Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in late March for an outright go long signal.
In this weekly bar chart of CG, above, we can see the long base pattern. Prices are now above the slightly rising 40-week moving average line. The weekly OBV line made a low in early 2016 and has been neutral or positive since then. The weekly MACD oscillator is above the zero line now after spending 2016 below it.
In this Point and Figure chart of CG, above, we can see the breakout trade at $17.50 and the longer-term potential price target of $26.00.
Bottom line: CG has pulled back quickly in recent days, and I would view this as a buying opportunity. Aggressive traders could go long CG here and add on strength. Risk a close below $16.50 for now; $26.00 is our potential price target.