Fortune Brands Home & Security Is Poised for a Breakout

 | Jun 27, 2017 | 10:54 AM EDT
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Fortune Brands Home & Security Inc. (FBHS) just needs a slight push for an upside breakout to new high ground. Sounds promising, but first let's look at the charts and indicators.

In this daily bar chart of FBHS, below, we can see that prices have rallied strongly from a double bottom of sorts made in late October and January. By the end of February, price had rallied above its November high, the 50-day and the 200-day moving average lines. In late March, the 50-day average line had crossed above the 200-day line for a bullish golden cross of these two popular averages.

FBHS tested the 50-day line in May and early June and is still pointed up. The daily On-Balance-Volume (OBV) has been rising steadily from late October, and with its implication of aggressive buying confirms the advance. The Moving Average Convergence Divergence (MACD) oscillator has been above the zero line for much of this year and is in a bullish mode now.

In this weekly bar chart of FBHS, below, we can see that prices are above the rising 40-week moving average line. The weekly OBV line has moved up all year and the MACD oscillator on this time frame is bullish too.

In this Point and Figure chart of FBHS, below, we can see a durable uptrend. Prices recently made a new high at $66 on this chart, which also shows a potential price target of around $89.

Bottom line: traders could go long FBHS when it makes a new high of $67. I would risk below $63 looking for gains into the upper $80s.

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