We reviewed the chart of Stanley Black & Decker (SWK) at the beginning of August and the short-term outlook was bearish, and we anticipated that, "Bear flag or not, SWK looks like it can decline to the $135 area in the short run."
Looking back over the past five weeks, we can see SWK declined toward the $135 area but it has since rallied back to its July highs. Our updated Point and Figure chart of SWK (third chart below) yields a $164 price target, so let's see if everything else is lining up on the upside.
In this daily bar chart of SWK, below, we can see prices are above the flat to slightly rising 50-day moving average line. The 200-day line is still rising. The daily On-Balance-Volume (OBV) line turned up at the beginning of the year and peaked in July. The decline in the OBV line from mid-July to late August matched the price decline. Prices are testing their July highs with a bullish Moving Average Convergence Divergence (MACD) oscillator and a firming OBV line.
In this weekly bar chart of SWK, below, we can see prices are above the rising 40-week moving average line. The weekly OBV line has been positive the past three years and goes a long way to confirming the uptrend from late 2014. The weekly MACD oscillator has been in positive territory (above the zero line) since April 2016 and looks to be narrowing toward a possible fresh go-long signal.
In this Point and Figure chart of SWK, below, we can see the long-running uptrend as well as a potential $164 price target.
Bottom line: SWK might hold around current levels in the very short term, but a push up to new highs seems inevitable. Aggressive traders can probe the long side risking a close below $139. Our target would be the $165 area.