21st Century Fox Inc. (FOX) is trading higher Tuesday morning on reports of a nearing deal with Disney (DIS) . Let's put aside all the deal talk, and just look at the charts and indicators to see what we can glean.
In this daily bar chart of FOX, below, we can see that prices were in a downtrend until early November. Prices quickly reversed to the upside and rallied to close above both the now rising 50-day simple moving average line.
A few days later, and FOX closed above the 200-day line, which has just turned upwards. The On-Balance-Line (OBV) was in a decline from February to early September, but then it turned higher, signaling more aggressive buying.
In the past four weeks or so, the 12-day momentum study has been showing lower highs, versus higher price highs. This describes a bearish divergence and tells us that the pace of the rally has been slowing. This can sometimes foreshadow a pullback or a decline.
In this weekly bar chart of FOX, below, we can see that prices broke out of a two-year consolidation pattern and they are trading above the rising 40-week moving average line.
The height of the pattern projected upwards yields a price target in the $39-$40 area. The weekly OBV line has begun to rise in recent weeks, and the trend-following Moving Average Convergence Divergence (MACD) oscillator is above zero and in a buy mode.
In this Point and Figure chart of FOX, below, we can see the uptrend in price and a possible bullish price target of $37.18. A trade at $34.61 will be a fresh upside breakout and a decline to $31.96 would weaken the chart picture.
Bottom line: we have an uptrend and upside price targets of $37 and $39/$40, so the real question is risk. Buyers and existing longs should risk a close below $31.