Tiffany (TIF) gaped to the upside today, extending the rally that started in late June. TIF is currently off its best levels of the day and prices could encounter some stale resistance above $85, but our longer-term indicators suggest that things still look very bright for that iconic Fifth Avenue address.
In this daily chart of TIF, below, we have a base pattern from December through early November. Declines to $60 and into the $60-$58 area were bought in January, February, June, July and August. Notice the heavy volume as prices reversed. Some discouraged long was probably selling shares of TIF while others were buying. If there wasn't equal interest on the buy side, TIF would have probably declined further. In early November a rally gets going from $72 to over $84 today. This is the breakout! The technical wind is at the back of TIF, with both the 50-day and 200-day moving average pointed up and the On-Balance-Volume (OBV) line climbing from a late June low. Buyers of TIF have been more aggressive for the past five months.
This aggressive buying does not suggest a buying climax and peak in prices, rather it supports still further gains. Momentum may yield a bearish divergence in the days ahead but that does not mean a reversal will happen.
In this three-year weekly chart of TIF, above, we have a lot more encouragement to be bullish. TIF is above the rising 40-week moving average line. The base pattern we saw on the daily chart looks like a powerful double pattern on this weekly chart. The weekly OBV line is neutral but only needs a slight uptick to make a confirming new high. The weekly Moving Average Convergence Divergence (MACD) oscillator generated an outright go long signal in September and remains in a bullish mode.
This Point and Figure chart, above, may look like a bunch of Xs and Os to the untrained eye, but with TIF moving above the $82 high in 2015 this chart yields an upside price target of around $104. Those blue boxes and bags must be doing something right.