National Oilwell Varco Has Broken Out of a Bullish Base...Buy It

 | May 22, 2018 | 8:11 AM EDT
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National Oilwell Varco, Inc. (NOV) was last reviewed in December 2016, and I liked the charts and indicators back then, "If you are not sure about the upside breakout for NOV on the daily chart, this Point and Figure chart, above, just broke out and the $55 area is the price target."

NOV has yet to reach my $55 price target but that could happen soon enough after the upside breakout this month. Let's look at some updated charts.

(For more on oil, see Jim Cramer's: Oil's Rise Shouldn't Be a Surprise -- And Don't Look for It to Stop)

In this daily bar chart of NOV, below, we can see how prices have strengthened since August. NOV is now above both the rising 50-day moving average line and the rising 200-day line. The current rally above $40-$41 breaks the late 2016/early 2017 highs.

The daily On-Balance-Volume (OBV) line has moved up with the price action and signals aggressive buying. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been above the zero line since March and is still in a bullish set-up.

In this weekly bar chart of NOV, below, we can see a bullish picture. Prices are above the rising 40-week moving average line. Prices have broken the previous resistance from late 2016.

The weekly OBV line has been positive since early 2016 and the weekly MACD is bullish.

In this Point and Figure chart of NOV, below, we have an upside price target of $52 after the breakout at $43.51.

Bottom line: NOV is in a strong move higher so buyers should not be timid and they should not wait for a pullback to do some buying. A correction will come but if could be from a higher level and it may well be a sideways affair. Risk below $40 for now looking for gains to the $52 to $60 area.

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