The biggest bull market is in housing, Jim Cramer told Mad Money viewers Thursday night, where homebuilders like Toll Brothers (TOL) and Lennar (LEN) can't build homes fast enough to meet demand. That means everything that goes into a home, from tools by Stanley Black & Decker (SWK) to furniture to everything sold at Home Depot (HD) is a buy.
Let's check out the charts of Stanley Black & Decker.
In this daily bar chart of SWK, below, we can see that prices have recently broken out to new 2020 highs. The rising 50-day moving average line was tested in September and prices managed to recover and trade to new highs. The 200-day moving average line also has a positive slope.
The trading volume has been low in recent weeks but the On-Balance-Volume (OBV) line has managed to make a new high and confirm the price gains.
The Moving Average Convergence Divergence (MACD) oscillator has turned up to a new outright buy signal after touching the zero line last month.
In this weekly bar chart of SWK, below, we went back four years to show that prices are positioned to break the highs of late 2017. SWK is in an uptrend above the flat 40-week moving average line.
The OBV line has improved but has not broken its late 2019/early 2020 highs.
The weekly MACD oscillator is bullish but it did narrow in recent weeks.
In this daily Point and Figure chart of SWK, below, we can see a potential upside price target in the $221 area.
In this weekly close only Point and Figure chart of SWK, below, we see that prices on this basis have already broken out to a new high. Here we can see a price target in the $220 area. Just like the daily chart.
Bottom line strategy: Traders who are long SWK from our July 20 recommendation - " Aggressive traders could go long SWK at current levels and they can add on strength. Risk a close below $138 for now. Targets start at $175 and range up to $240 and $267 longer term" could raise stop protection to $160 now. Our new price targets are the $220 area and then $240.