Joby Aviation (JOBY) stock has rallied sharply on landing an FAA certificate for its first production prototype. Trading volume has surged sharply as traders seem to be rushing into the "next new thing".
Let's strap in and look over the charts and indicators.
In this daily bar chart of JOBY, below, I can see that the stock has "gone vertical" in recent days but the rally started earlier in May around $4. Incredible. Prices trade above the rising 50-day moving average line and the rising 200-day line. The 200-day moving average line intersects around $4.50 so with prices trading at more than twice the 200-day line they are considered extended (overbought).
The On-Balance-Volume (OBV) line turned higher in late December. The Moving Average Convergence Divergence (MACD) oscillator is bullish.
In this weekly Japanese candlestick chart of JOBY, below, we do not have the benefit of this week's price action but the picture is bullish. Prices are in an uptrend above the rising 40-week moving average line. Trading volume has been increasing. The weekly OBV line is strong and the MACD oscillator turned bullish in May.
In this daily Point and Figure chart of JOBY, below, I used a five box reversal filter to get the software to generate an upside price target in the $42 area.
In this weekly Point and Figure chart of JOBY, below, I can see an upside price target in the $20 area.
Bottom line strategy: We've seen this movie before. Prices make a huge rally and short-term traders take their quick profits. JOBY is extended on the upside and this is not the time nor the place to go long.
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