The Children's Place, Inc. (PLCE) has bottomed the past five months and looks poised for a stronger rally ahead. The last time I checked out PLCE was way back in November, where I wrote, "Bottom line: if you are long PLCE from lower levels, continue to hold for higher price targets, but consider raising sell-stop protection to a close below $125. The $150 area is the most likely price target as we head into year-end."
PLCE reached our $150 in January but then corrected all the way back down to around $115 in July. Prices have improved since July and PLCE is worth looking at again.
In this daily bar chart of PLCE, below, prices are back above the rising 200-day moving average line and above the bottoming 50-day average line.
The On-Balance-Volume (OBV) line is very interesting in that it did not make a new low in July when prices made a new low. Prices declined but sellers did not press on the decline. The OBV line is now close to making a new high for the move up.
The daily Moving Average Convergence Divergence (MACD) oscillator is in a bullish configuration above the zero line.
In this weekly bar chart of PLCE, we can see a bullish set-up. It looks like PLCE will close above the rising 40-week moving average line.
The weekly OBV line has turned up again and the MACD oscillator has crossed to the upside for a cover shorts buy signal.
In this Point and Figure chart of PLCE, below, we can see an upside price target of $164.28.
Bottom line strategy: If you can afford to risk below $125 you can probe the long side of PLCE at current levels. Add on strength above $143.60 looking for gains to the mid-$160's.