Juniper Networks Inc. (JNPR) was upgraded Friday to a buy by TheStreet's Quant Ratings service. JNPR had a strong-looking chart before this buy recommendation but now JNPR is closer a major upside breakout on the charts. Let's see how these two approaches -- technical and quantitative -- can work together.
In the updated daily bar chart of JNPR, below, we can see a key low in April/May. Prices rallied into July and then we saw a brief pullback/retest at the end of July and early August. By the end of August JNPR was back up to a new high, showing us that there was strong underlying buying in the stock. Prices are above the rising 50-day average line and the flat 200-day line.
The daily On-Balance-Volume (OBV) line did not dip much when prices gapped lower and it has since moved up to a new high. The trend-following Moving Average Convergence Divergence (MACD) oscillator has crossed to the upside for a fresh go long signal.
In this weekly bar chart of JNPR, below, we can see that prices are above the now rising 40-week moving average line. The weekly OBV line has been strong for the past four years. The weekly MACD oscillator is bullish.
In this Point and Figure chart of JNPR, below, we can see that a trade at $31 will be a double-top breakout and open the way to a $37 price target.
Bottom-line strategy: JNPR is bullish looking. It has a strong technical story and an upside price target. Today's quantitative upgrade to buy is icing on the cake. Traders could go long JNPR here and above $31. Risk below $27.50 for now and look for gains to the upper $30s.
