Tapestry Inc. (TPR) soared sharply higher yesterday. What did this do to the charts and indicators? Way back in early April we looked at the charts, and I summed up the outlook this way: "TPR is still pointed up but with some of indicators slowing, we want to be cautious going forward. I would suggest a sell stop below $50 now." TPR continued higher in April and then gapped sharply lower in May. Prices reached a low in late May and recovered from there. Prices are now back into the April peak area, so let's check some updated charts.
In this daily bar chart of TPR, below, we can finally see a positive alignment of our favorite indicators. Prices are back above the rising 50-day and the bullish 200-day moving average lines.
(For more on Tapestry, see Worried About the Right Thing?: Cramer's 'Mad Money' Recap)
The daily On-Balance-Volume (OBV) line bottomed in May and is now back up to it's March/April peaks. A rising OBV line tells me that buyers of TPR have been more aggressive and have traded more shares of stock on days when TPR has closed higher. The Moving Average Convergence Divergence (MACD) oscillator has been hugging the zero line since early July, but is turning upwards for an outright go-long signal.
In this weekly bar chart of TPR, below, we can see that prices have been an uptrend for the past three years. Prices have been above and below the rising 40-week moving average line, but are back above it now.
The weekly OBV line has been strong since early 2017 and is close to making a new confirming high. The weekly MACD oscillator is turning up to a fresh outright go-long signal on this longer timeframe.
In this Point and Figure chart of TPR, below, we can see Tuesday's strong rally with no gap. A longer-term price target of $72.26 is being indicated. A trade at $55.25 will be bullish and open the way to further gains.
Bottom line strategy: TPR had a very strong trading session yesterday, and a period of sideways trading is likely as some traders take some profits and others do some buying. Once this brief consolidation period is over, I would look for renewed gains. Traders could look to buy a dip to around $52 and add above $55.25 looking for gains to the low $70s.