PPL Corp. (PPL) was upgraded today to a "Buy" recommendation from TheStreet's quantitative service. This Pennsylvania-based utility pays a healthy dividend and now displays a nice six to seven month base pattern. Let's shed some light on the charts and indicators to round out the analysis.
In this daily bar chart of PPL, below, we can see that PPL is trading above the rising 50-day simple moving average line. The 200-day moving average has been bearish since December but in the past week PPL has been testing the declining moving average line.
The volume of trading looks like it declined from June to July to August but the daily On-Balance-Volume (OBV) line shows a rising line from early June suggesting that buyers of PPL have been more aggressive with more volume being traded on days when PPL has closed higher.
The Moving Average Convergence Divergence (MACD) oscillator looks poised to turn higher for a fresh go long signal.
In this weekly bar chart of PPL, below, we can see some improvement. Prices are testing the declining 40-week moving average line.
The weekly OBV line shows a recovery in June and then a sideways pattern the past two months. It will be positive if the OBV line moves up to a new high.
The weekly MACD oscillator gave a cover shorts buy signal in April and is now closer for a crossover of the zero line.
In this Point and Figure chart of PPL, below, we can see an upside breakout at $29.81 and a potential longer-term price target of $37.46.
Bottom line strategy: PPL has made a decent base pattern on the chart. We have a quantitative buy recommendation, a nice dividend, a significant upside price target and I would use a risk point below $27.50. What more do you need?