The chart of Paychex, Inc. (PAYX) shows a near vertical rally from August. The quick look at just the chart would tell you that this was a powerful move to the upside, however, the art and science of technical analysis involves more than just looking at a simple price chart. Let's look closer.
In this daily bar chart of PAYX, below, we can see that prices corrected lower from January to August. Prices cross above and below the 50-day and the 200-day average lines. The On-Balance-Volume (OBV) line moves up and down for eight months without a sustained trend until August. From August the OBV line climbs sharply signaling some very aggressive buying. In the lower panel is the 12-day momentum study. From August to December the momentum slows despite prices making higher highs. This condition is a bearish divergence and is a "yellow traffic light" or heads up that the pace of the advance is slowing. Momentum is a leading indicator and it peaks before prices peak.
In this weekly bar chart of PAYX, below, we can see that prices are above the rising 40-week moving average line. The weekly OBV line is rising but not at such a dramatic pace as the daily line. The MACD oscillator is in a bullish mode but extended on the upside.
In this Point and Figure chart, below, we can see that there is an upside price target of $100 but the straight up move on this chart tells us a correction is overdue.
Bottom line: Can PAYX continue to go up? Sure, but the rally is extended and I would be prepared for a pullback or correction.