We covered Analog Devices Inc. (ADI) about a month ago in Kamich's Korner and summed up our strategy this way: "ADI could trade sideways around $90 for a while, but the major trend is still up and our next potential price target is the $98 area, but in this bullish market environment don't be surprised we reach $100." With rally so far today on ADI it looks like the stock could soon reach the $98 and $100 price targets we noted last month.
Let's check out the current set of charts and indicators to see what else they might reveal. The $124 area could be the next longer-term price target after we clear $100.
In this daily bar chart, below, we can see that ADI is trading above the rising 50-day moving average line and the rising 200-day line so we can say the trend is up. The daily On-Balance-Volume (OBV) line turned upward in early May signaling more aggressive buying. The OBV line has leveled off in recent weeks but is very close to making a new high for the move up.
The Moving Average Convergence Divergence (MACD) oscillator has been above the zero line since late August but gave a take profits sell signal in early November. The two moving averages that make up this indicator have begun to narrow toward a possible bullish crossover.
In this weekly bar chart of ADI, below, we can see that prices are above the rising 40-week moving average line. Volume has slowed in recent months but the weekly OBV line has made new highs along with the price action. The MACD oscillator crossed to the upside in early September for an outright go long signal.
In this Point and Figure chart, below, we can see the uptrend and a $98.05 price target. A trade at $93.61 will be a new high for the move up on this chart and could open the way for a longer-term move to a $124 price target (chart not shown).
Bottom line: Traders should continue to hold longs and investors, too. Targets of $100 and even $124 are possible in this bull market. A close below major chart support around $85 would be bearish.