We have not looked at Emerson Electric Co. (EMR) for a while, when we said, "EMR might pull back a little more and that dip should be a buying opportunity." Prices dipped and then traded sideways for five months before another rally got under way. Prices made a nice rally from late August but a new pullback started recently. Will this current pullback be another buying opportunity? Let's explore the charts and indicators this morning.
In this daily bar chart of EMR, below, we can see that prices rallied nearly $10 in the past two months and now a pullback or correction is unfolding. There is some chart support (former resistance on the way up) in the $64-$63 area from the latter part of September to the first part of October.
Prices are still above the rising 50-day moving average line and the rising 200-day line. Volume increased on the decline and the On-Balance-Volume (OBV) line turned lower. The Moving Average Convergence Divergence (MACD) oscillator crossed to the downside generating a take profits sell signal.
In the weekly bar chart of EMR, below, we can see what will probably turn out to be a two-week reversal -- a high close last Friday followed by probably a low close today. Prices are still above the rising 40-week moving average line.
The weekly OBV line shows two trends -- an uptrend from early 2016 to the beginning of 2017. Another uptrend looks like it began in August of this year. A rising OBV line tells us that buyers are more aggressive. In the bottom panel is the weekly MACD oscillator. There is a bullish crossover buy signal in September but the two moving averages that make up the indicator have begun to narrow.
In this Point and Figure chart of EMR, below, we can see that good support on this chart starts down at $60.42.
Bottom line: The longer-term charts of EMR are bullish so if the stock pulls back and holds above support this could be a buying opportunity. Holding in the $62-$61 area would be ideal.
