We reviewed the charts of building materials' maker Masco Corp. (MAS) recently, and we said, "MAS might build a higher level base in the $37-$40 area before renewed strength is seen. Our upside price target is $50. A close below $36 would change our opinion." Now that prices have surged to new highs, another look at MAS wouldn't hurt. Let's check the latest charts and indicators.
In this daily bar chart of MAS, below, we can see that prices are above the rising 50-day moving average line, after a successful test of the line in the first half of November. The $41-$40 area was nearby resistance in October, and on a pullback, should it happen, it should act as support.
Buyers of MAS have been aggressive, looking at the rising On-Balance-Volume (OBV) line. The OBV line has risen steadily since April. The Moving Average Convergence Divergence (MACD) oscillator is well above the zero line in bullish territory, but the two moving averages that make up this indicator could be narrowing.
In this weekly chart of MAS, below, we can see that prices are above the rising 40-week moving average line, which has done a great job the past three years in identifying the uptrend. The weekly OBV line is bullish, and the MACD oscillator on this timeframe has just turned up to a fresh go long signal.
In this Point and Figure chart of MAS, below, we can see the uptrend and our $50 price target.
Bottom line: longs from lower levels should hold. Looking to buy or add to a position? Use available price weakness. Stops should be raised to a close below $39.
