Children's Place (PLCE) has broken out of an eight-month sideways consolidation pattern. The bulls are in control and probably won't get tired until they reach a new plateau.
In this chart of PLCE, below, we go back twelve months with the price action. For eight of the last twelve months, PLCE has been in a sideways consolidation pattern that chartists often call a "rectangle." This rectangle shaped pattern is between $65 on the downside in May and $90 on the upside in July.
During this consolidation period, the 200-day moving average line is rising and the 50-day crosses below and above the price action until November. Notice how both averages turn to the upside in recent days.
The rising, On-Balance-Volume (OBV) line over the past year tells you that buyers of PLCE have been more aggressive for months and have accumulated stock. In the bottom panel is the momentum study, our favorite leading indicator, and there is no bearish divergence yet between the price action and the indicator.
This three-year weekly chart of PLCE, below, supports the shorter daily chart with its positive stance. Prices are above the rising, 40-week moving average line after a month below the line. The weekly OBV is pointed up and is not far from a new high for the move up. The weekly Moving Average Convergence Divergence (MACD) oscillator just gave a new go-long signal above the zero line.
Price targets? The height of the eight-month consolidation is $25 at its widest point, and adding that to the breakout at $90 gives us $115 as an initial price objective. A point and figure "count" gives us a $125 price target. A close below $95 would be my risk point.