Tyco International (TYC) is a name from the past that conjures up toga parties for some, but TYC has an impressive chart worth considering.
In this daily chart of TYC, above, we can see a "V-like" bottom and upside reversal in January. Prices have improved about 50% from their nadir at the beginning of the year. TYC is above its rising 50-day and 200-day moving averages. The On-Balance-Volume (OBV) line was neutral/flat from January through April but shows a good uptrend since May. Prices and the OBV line both made new highs yesterday. The only way the OBV line rises is if there are more shares of TYC traded (volume) on days when it closes higher. Joe Granville, back in the early 1960s, postulated that this movement in the OBV line meant buyers were more aggressive and were accumulating long positions.
There was a May-July bearish divergence until yesterday. Notice the equal highs for TYC in late May and early July while the 12-day momentum study made a much lower second high in July. Even though we had equal price highs, the second high was inherently weaker with much less momentum behind it.
In this weekly chart of TYC, above, we can see a roughly two-year slide in TYC from above $46 to below $30. The two-year decline was recouped in about half a year -- impressive. The weekly OBV line shows a strong upside response and suggests this rally is durable. Prices are above the rising 40-week moving average line and that looks like the direction in which we should trade. The Moving Average Convergence Divergence (MACD for short) oscillator has been in bullish territory for about three months.
In this Point-and-Figure chart of TYC, above, we get a different perspective on the price action. Point-and-Figure charts are driven by the price movement and not the rotation of the Earth. Volume and time are basically ignored. Small price "jiggles" are also ignored as we plot only price moves of more than $1 above the $20 threshold. This Point and Figure chart clearly shows the breakout to a new high at $45. Point and Figure charts are also used for long-term price targets. TYC's long-term target projects to $71, according to this chart. I would remain positive on TYC as long as it does not close below $40.