Investing Isn't an 'Exact Science' but the Charts Do Look Good

Investors can stay long EXAS, as it shows us bullish long-term potential.

During Tuesday's "Mad Money" program, Jim Cramer called out Exact Sciences Corp. (EXAS) , which just announced it will be acquiring the privately-held Thrive for $2.1 billion. Shares of Exact Sciences closed up 23% Tuesday.

We reviewed the charts of EXAS on Oct. 8, and wrote that, "EXAS is likely to consolidate its recent gains. I would anticipate some sideways trading in the $110-$100 area for a short period. Aggressive traders could use available weakness to go long risking a close below $95. The $187 area is our price objective."

Let's check out the charts again now that prices have surged close to $142.

In this daily bar chart of EXAS, below, we can see that prices traded sideways in the $110-$100 area before surging higher the other day. Traders had plenty of time to buy. Both the 50-day moving average line and the 200-day moving average line have positive slopes now. The trading volume surged and the On-Balance-Volume (OBV) line jumped to a new high telling us that buyers of EXAS have been very aggressive. The Moving Average Convergence Divergence (MACD) oscillator has crossed to the upside for a go-long signal. 

 

 

 

In this weekly bar chart of EXAS, below, we can see a bullish picture with a few more days in the week. Prices have surged to a new high. The 40-week moving average line now has a positive slope and the OBV line has made a new all-time high to confirm the price gains. The MACD oscillator shows a bullish alignment above the zero-line. 

 

 

In this daily Point and Figure chart of EXAS, below, we can see a potential price target in the $224 area. Not bad. 

 

 

 

Bottom line strategy: Stay long EXAS. Raise stop protection to a close below $106 from below $95. The $200 area is our first price target followed by the $224 area.

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