Danaher Corp. (DHR) was last reviewed at the end of May. At that time I wrote that Danaher "has traded sideways since early 2018 and prices look poised for an upside breakout. Weakness in the major averages could push back the timing of a breakout, but it looks like a matter of when and not if." Our own Jim Cramer discussed the company and its prospects on his "Mad Money" show last evening. Let's check out the charts again for this diversified supplier of medical, dental and industrial products that is a holding of Jim's Action Alerts PLUS portfolio.
In this updated daily bar chart of DHR, below, we can see that last week prices made a "common gap" higher and rallied briefly to a new high. DHR had a quick pullback and looks to be resuming the rally.
Prices are above the rising 50-day moving average line. From the middle of June to the middle of July DHR dipped toward the rising 200-day moving average line; in hindsight, this looks like a buying opportunity. The volume pattern shows heavier volume in the past week as prices made new highs for the move up. The daily On-Balance-Volume (OBV) line has edged up to a new high this week to confirm the price gains. The daily Moving Average Convergence Divergence (MACD) oscillator has just crossed above the zero line for an outright go-long signal.
In this weekly bar chart of DHR, below, we can see a strong uptrend the past three years. Prices have spent nearly the entire time above the rising 40-week moving average line. The weekly OBV line has been steady for more than two years but looks like it is turning higher again. The weekly MACD oscillator has been in a take-profits mode all year. but this indicator looks to be poised to turn up again. This would be a fresh buy signal should it happen.
In this Point and Figure chart of DHR, below, we filter out volume and small jiggles in price. Gaps are not plotted. Here we can see a breakout to $105.49 and a longer-term price target of $121.60 being projected.
Bottom line: Traders and investors in DHR should go with the upside breakout and continue to buy strength. Risk below $98 for now, looking for gains to the $120 area in the weeks ahead.