There are things working in this market. Again, we need to veer off the normal search pattern. WD-40 (WDFC) was one of the few stocks to show up in bull scans yesterday, and it appeared in several different scans, which really caught my attention.
First, we have price breaking out above a wide ascending triangle of the last month. This could push us into the mid $90s. In addition, we have a strong moving average convergence divergence (MACD) and a Commodity Channel Index (CCI) just looking to break over 100. I'm fine with the overbought CCI, as long as it stays overbought.
One other development of note here is the action in the Parabolic Stop and Reverse indicators (Psars). We have this light red "party hat", or arrow formation. The color only forms when all three Psars on the chart go from bullish to bearish then back to bullish over three days. These three Psars represent a short-term, intermediate term and longer term view.
It has been one of the more successful patterns over 2015 that I follow. I would simply stay long until either the 21-day simple moving average or the rising support at $86 fail on a closing basis.
The weekly chart actually looks stronger for WDFC. A cup and handle pattern is in play, but it's tough to call this action a breakout yet. The upside here paints a $94 target, which melds well with the daily chart.
However, I do believe we would see momentum carry WDFC to $100. I only use two psars on the weekly chart, but a few weeks ago we saw both the short and long-term Psars move from bearish to bullish on the same bar.
The last time we witnessed this was back in October 2014, right before a big move. Back then, we also saw a bullish crossover in the MACD, similar to what we are seeing here. Additionally, the CCI crossed over 100 in conjunction with the Psar flip, which we are seeing once again.
In a market jerking you from side to side each day, WDFC has put together a very bullish and very consistent picture here. I'm looking to buy this one on a retest of $88.