Berkshire Hathaway (BRK.A) jumped over 2% this morning as traders and investors reacted to the latest earnings report. Berkshire Hathaway is a unique chart with respect to the price level. Trying to analyze this chart requires, at least for me, ignoring the three zeros to the right. The chart is easier to reconcile in my mind if we are trading around $215 instead of $215,000. Sounds silly, but that's how my mind deals with big numbers.
Early in my business career, I learned not to focus on the money. Obviously, money is not to be ignored, but if you get hung up on the zeros you won't be much help to your clients. Maybe we should be like Warren Buffett, who said, "You try to be greedy when others are fearful, and fearful when others are greedy."
In this daily chart of BRK.A, above, we can see prices dipped toward the rising 200-day moving average line and then closed mid-range. Prices were below the declining 50-day average line for seven weeks, but today's rally has taken the stock price back above this math-driven indicator. The daily On-Balance-Volume (OBV) peaked in August/September and turned lower over the past two months. This declining OBV line suggests traders were more aggressive on the sell side and may have been "offsides" before the latest earnings report. The Moving Average Convergence Divergence (MACD) oscillator just signaled a new cover-shorts buy signal.
This four-year weekly chart of BRK.A, above, is interesting. BRK.A has been in a very wide sideways trading range since early 2014. Strength over $230,000 would be a major breakout from this range. Prices are above the rising 40-week moving average line. The weekly OBV line is neutral while the MACD oscillator is pointed down from a recent liquidate-longs sell signal.
Bottom line: While the longer-term picture of BRK.A is still neutral, the short-term chart could be turning up for a test of the 52-week highs. A close back below $210,000 would weaken the picture.