We last checked in on the charts of Adobe Systems Inc. (ADBE) in late August, when we wrote, "The chart projects $162.40 as ADBE's next upside price objective, up from the stock's current roughly $155 a share. The bottom line? As I wrote in early July, traders who are long ADBE should raise sell/stop protection to a close below $140 and set their sights on the low $160s as Adobe's next milestone to reach."
Checking the charts of ADBE this Friday morning, we can see that prices gaped past our $162.40 price target to reach $186 and change. Our sell stop below $140 was not touched. A short victory lap -- and now what? Let's check the charts and indicators again.
In this daily bar chart of ADBE, below, we can see that prices dipped in September, but came back strong in October. Prices gaped to the upside on strong volume. A dip earlier this month failed to move into the gap area after testing the rising 50-day moving average line. The longer-to-react 200-day moving average line is still rising.
The daily On-Balance-Volume (OBV) has been going up in the past twelve months and is close to making a new high for the move up. The trend-following Moving Average Convergence Divergence (MACD) oscillator is down around the zero line, but new price strength should turn this indicator positive again.
In this weekly bar chart of ADBE, below, we can see that the price gap disappears, but the chart remains strong. ADBE is above the rising 40-week moving average line. The weekly OBV line has been strong since early 2017 and the MACD oscillator is well above the zero line. The oscillator has narrowed towards a cross, but fresh price strength could move the two moving averages apart.
In this Point and Figure chart, we have no gaps and no volume and small jiggles are eliminated. A $194 price target is shown.
Bottom line: Hold longs and consider adding to longs on strength. $194 is our target now and I would suggest a sell stop below $165.