The animal health company Zoetis (ZTS) broke out to the upside yesterday. Prices had been trading sideways to slightly higher since March but a big rally Thursday pushed share prices to new highs. Let's take the charts and indicators for a walk and see how high they may go in the weeks ahead.
In this daily bar chart of ZTS, below, we can see Thursday's upside breakout. Easy to spot. Prices had been crossing above and below the flat 50-day moving average line but now the line should act as support. The slower-to-react 200-day moving average line has been rising for months and intersects below $80 now.
The daily On-Balance-Volume (OBV) line has been in a neutral or flat trend from late February and shows some softness the past month. A rising OBV line would be a plus and an OBV line at a new high would be a double positive.
The daily Moving Average Convergence Divergence (MACD) oscillator (lower panel) is turning up above the zero line for an outright go long signal.
In this weekly bar chart of ZTS, below, we can see that prices have more than doubled in the past three years - impressive. Prices are above the rising 40-week moving average line which has been a great indicator to keep you in this bull move since early 2016.
The weekly OBV line shows a strong rally from early 2016 to an April 2018 peak. Prices have moved higher despite the OBV line showing softness the past four months.
The weekly MACD oscillator has narrowed recently and is close to a bullish crossover and new buy signal.
In this Point and Figure chart of ZTS, below, we can see the upside breakout at $89.96 and a new price target of $102.52.
Bottom line: If you are already long ZTS you are in the driver's seat. Risk to $86 and look for gains to $102 and probably higher. Not long ZTS? Try to buy a dip to $90 and risk to $86.
