DowDuPont Inc. (DWDP) is trading about $1 higher in pre-market action this Thursday morning in reaction to its latest quarterly numbers -- an impressive move with the broad market indicated sharply lower. DWDP was reviewed in the middle of June. At that time I wrote, "Our $71.40 target is close. The $74 and our new $80 target will take some time." A close above the 200-day moving average line today will be a positive signal. What else should we look for from the chemical giant, which is a holding in Jim Cramer's Action Alerts PLUS portfolio?
In this daily bar chart of DWDP, below, we can see that prices rallied the past week or so ahead of today's numbers. Prices touched the underside of the 200-day moving average line. A close above the line and the early June highs will be bullish. DWDP is above the flat 50-day average and a few strong up days could turn the slope of the average line positive.
The daily On-Balance-Volume (OBV) line shows a decline into the middle of July and then a small uptick. Hopefully the OBV line continues to rise, telling us that buyers are being more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator has turned up above the zero line for an outright go-long signal.
In this traditional 1x1 Point and Figure chart of DWDP, below, we can see that a trade at $71 will be a double-top breakout with a possible price target of $80.
Bottom line: The broad market looks weak this Thursday morning, so I will be more impressed if DWDP can show independent strength. A rally to $71 refreshes the uptrend.
