Biogen Inc. (BIIB) has been trading in a very tight range for several weeks now and is poised to make an upside breakout in my opinion. Let me make my case with the charts.
In this daily bar chart of BIIB, below, we can see that so far this year the price of BIIB has been moving sideways in a tight range around the 200-day moving average line. Trading volume has been declining which is typical of a triangle consolidation pattern.
The On-Balance-Volume (OBV) line has been working lower which suggests that sellers of BIIB have been more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator has been hugging the zero line recently telling us that there is not much in the way of trend strength. Another way of looking at this is that the MACD could quickly turn positive (or negative).
In this weekly Japanese candlestick chart of BIIB, below, we see an interesting picture. Prices have been moving sideways for several months but notice the large lower shadow in March as traders rejected the lows. The slope of the 40-week moving average line is bearish but prices are trading above it.
The weekly OBV line is more positive looking than the daily line. The weekly MACD oscillator is pushing above the zero line for a buy signal.
In this daily Point and Figure chart of BIIB, below, we can see a potential upside price target in the $339 area.
Bottom line strategy: Traders could go long BIIB here and on strength while risking to $255. The $340 area is our first price objective.
