Campbell Soup Co. (CPB) was reviewed in February, where I wrote that, "Sticking with a strategy of buying strength, aggressive traders could go long CPB on a close above $48 or above $50, risking a close below $44." CPB did not close above $48 and continued to sink lower into an early June low below $34. After a May/June "wash out" the share price of CPB has come back smartly. Is there more on the upside? Let's check out the latest charts.
In this daily bar chart of CPB, below, we can see some recent improvement in the technical condition of this stock. Prices were in a downtrend for much of the past twelve months but since the June low prices have made a higher high and a higher low for the start of an uptrend. Prices are testing the declining 200-day moving average line while they are above the now rising 50-day line. The daily On-Balance-Volume (OBV) line has also shown a new uptrend the past two months. The trend-following Moving Average Convergence Divergence (MACD) oscillator has turned upwards for a fresh outright go long signal.
In this weekly bar chart of CPB, below, we can see a two-and-a-half year decline. Prices have been below the declining 40-week moving average line for a long time and now that line is being tested. The weekly OBV line made a sharp rise as the volume of trading was heavy and CPB closed higher for a number of weeks in a row. The weekly Moving Average Convergence Divergence (MACD) oscillator crossed to the upside from below the zero line for a cover shorts buy signal at the end of June.
In this Point and Figure chart of CPB, below, we can see a bullish price target of near $61 being projected.
Bottom line: Since the middle of May we have seen some very aggressive buying of CPB. Money is betting on the upside and the charts have improved in recent days. Aggressive traders could probe the long side risking below $38 and looking for intermediate-term gains to $60.