Dover (DOV) has broken out of an 11-month base pattern and further gains are expected in the weeks and months ahead.
In this daily chart of DOV, above, you can see the "process" of a base pattern. Last August and September, DOV dips toward $55 and rallies. The rally fails by early December and prices briefly fall to a new low below $55 but quickly regain that level. In February through May, DOV makes higher lows but it doesn't decisively clear the highs of December 2015 until this week. Prices are above the rising 50-day and 200-day moving averages now. The On-Balance-Volume (OBV) line moved sideways last year, but it looks like the up move that began in early May will keep going. The Moving Average Convergence Divergence (MACD) oscillator has turned up from the zero line to a fresh go-long signal.
This three-year weekly chart of DOV, above, shows the turnaround from a long downtrend from $90 in mid-2014 to the basing pattern discussed above. Prices have rallied above the 40-week moving average line and the slope of the line has finally turned up. The weekly OBV line is inching higher and the weekly MACD oscillator is in the go-long mode above the zero line. The height of the base pattern projected upward gives us an upside target of $80. A breakdown and close below $65 would look like a failed breakout and prompt us to liquidate any long positions.
