Years after the financial meltdown of 2008-09, many stocks in the financial sector remain stuck in long-term base patterns. Discover Financial Services (DFS) , however, is one stock in the sector with some upside on the charts. Check it out.
In this daily chart of DFS, above, you should be able to recognize the "V" bottom in February. From that low, there is a strong rally along with a gap to an April peak at $58. That area proved to be resistance for the next four months until DFS broke out to a new high last week. The new price high was confirmed by a new high on the On-Balance-Volume (OBV) line. Prices are above the rising 50-day and 200-day moving averages, so we are likely to see the $58 area become support.
In this three-year weekly chart of DFS, above, we can see DFS has retraced more than half of its previous decline, putting the bears on the defensive. Prices are above the rising 40-week moving average line. The OBV line is showing some improvement and the Moving Average Convergence Divergence (MACD) oscillator is firmly in bullish territory. DFS looks strong enough to push up into the mid-$60s in the weeks ahead.