Can Goodyear Tire & Rubber (GT) make 2015 a great year?
The stock is already up over 12% year to date, so I would put it solidly in the "good" category for 2015. But GT's longer-term weekly chart shows that the stock might have plenty of more gas in the tank.
Let's start with the short-term chart first, though:
GT tested $29 twice in July, creating a double bottom on the daily chart above. Now, if we close under that double bottom, then it's wrong to have a positive outlook on the stock. The risk-vs.-reward quotient simply won't be there.
But that double bottom is also part of a "W" price formation, which is usually a bullish pattern. With Goodyear already peaking above $31.50 a share, it only has the $32.50 area of resistance left.
We're about to see the 10-day simple moving average (SMA) cross over the 50-day SMA, as well as the MACD cross over in bullish fashion. When that last happened in late March, the stock took off for a 20% move higher.
Goodyear's Relative Strength Index (RSI) is also close to the same level it was at in March as well. (Actually, it's a bit stronger.)
I don't think we're ready to see another 20% rally, but I do have a $36 price target on the stock from here. Even if you wait for Goodyear to break $32.50 on the upside, it still wouldn't be disappointing to hit $36 by year's end.
The uptrend is very clear on Goodyear's weekly chart as well:
Ironically, the stock's level is even a bit higher than what we saw on the daily chart. Within another two weeks, it should be up to $30 as the line in the sand for the bulls, although support does come in around $28.
This appears to be setting up more like a cup-and-handle pattern, with about the same $36 target that the daily chart shows. So, there's consistency between the two charts.
A bullish MACD crossover here has usually been good for at least a two- to three-week pop, but keep an eye on the stock.
If it doesn't move higher by the end of the second week, then switch to a daily focus for the stop. Overall, this falls back into the conservative thesis of wanting to be in the market, but not wanting to chase or be overly aggressive.