Cintas Corp. (CTAS) was favored by Jim Cramer in his fast-paced "Lightning Round" during Friday's Mad Money program on CNBC. Prices have climbed significantly the past three years, but we are concerned with the future. Let's tune into the charts and indicators today.
In this daily bar chart of CTAS, below, we can see that prices have been making new highs since late April. CTAS made a "V" bottom in late December and rallied smartly. Prices are above the rising 50-day moving average line as well as the bullish 200-day average line. In the middle of March, we can see a bullish golden cross of our two favorite averages. The daily On-Balance-Volume (OBV) line turned up in late December with the market, and made a new high by February. New highs continued into early June to confirm the price gains. The 12-day price momentum study shows some slowing in the pace of gains, but this leading indicator is not a good timer of reversals.
In this weekly bar chart of CTAS, below, we can see the strong gains from the middle of 2016. Prices have made new highs for the move up and are above the rising 40-week moving average line. The weekly OBV line has moved up with prices this year, but interestingly it has yet to make a new high. The 12-week price momentum shows that the pace of price gains has slowed, but this is not a bearish divergence.
In this Point and Figure chart of CTAS, below, we can see a longer-term upside price target of $281.
Bottom line strategy: Aggressive traders could look to buy a slight dip in CTAS, perhaps towards $230. Risk below $215 for now looks for longer-term gains to the $275-$280 area.