Shares of Action Alerts PLUS holding Dow Chemical (DOW) stumbled this summer, but like a strong athlete, DOW has quickly recouped and is knocking on new all-time highs.
DOW made a small top formation in June and July and then skidded down to $36 from above $52 in a few short weeks. Oddly, you can see a death cross occurred near the bottom. A death cross is when the 50-day moving average crosses below the longer 200-day moving average.
There was a retest of the August low at the end of September and then a rapid rally back to $52. The On-Balance-Volume (OBV) line is moving up strongly and supports or confirms the advance.
In this longer-term view of DOW, above, we can see that prices are testing resistance in the $50-$55 area. The OBV line is positive on this timeframe and prices are above the 40-week moving average. In the lower panel, we can see that the Moving Average Convergence Divergence oscillator has crossed from below the zero line. For aggressive traders this can be another buy signal.
If DOW can push out to a new high, the price targets using either this bar chart or a point and figure chart measure to the $70-$75 area.