In this daily bar chart of EADSY, below, we can see a very mixed picture. Prices have been in an uptrend the past twelve months but our indicators do not give it a strong vote of confidence. Prices are above the rising 50-day moving average line and the bullish 200-day average line but those two indicators do not give us any clues about the future as they just react to prices. There have been a number of price gaps the past year but they are in large part due to the thinness of trading that is largely done overseas in other financial centers. Despite the light volume the daily On-Balance-Volume (OBV) line has been weakening since November and the daily Moving Average Convergence Divergence (MACD) oscillator has spent a lot of time near the zero line.
In this weekly bar chart of EADSY, below, we can see a mixed picture with respect to our favorite indicators. Prices are above the rising 40-week moving average line so we know the trend is still up. The pace of trading volume has been disappointing and the weekly OBV line has diverged from the price action for months. The OBV line has been weak the past two months and suggests that prices could decline. The weekly MACD oscillator gave a take profits sell signal in March and while the two moving averages of this indicator have narrowed they have not yet signaled that we should go long.
In this Point and Figure chart of EADSY, below, we can see a sideways consolidation pattern and an upside breakout. A really nearby upside price target of $35 is indicated.
Bottom line: While the Point and Figure chart suggests we can see gains to $35 the daily and weekly OBV lines have not been encouraging. Traders should take a pass on the long side of EADSY for now. A weekly close below $28 would break the 40-week moving average line.