Biopharmaceutical firm Alkermes plc (ALKS) has been trading sideways since February. The shares tested the rising 200-day moving average line in August. The key question now is whether ALKS can break out to the upside.
Let's check the charts and indicators.
In the daily bar chart of ALKS, below, I can see that the shares rallied strongly Tuesday and are now firmly back above the 50-day moving average line and the 200-day moving average line. The On-Balance-Volume (OBV) line shows some weakness from June into late August but it is now improving. The Moving Average Convergence Divergence (MACD) oscillator has been improving and shows a bullish divergence in August when the shares made a lower low.
In the weekly Japanese candlestick chart of ALKS, below, I can see that share prices have been a large $22-$34 trading range. A weekly close above $34 will be an upside breakout. The stock trades above the rising 40-week moving average line.
The weekly OBV line has mostly been moving in an upward trend the past three years. The MACD oscillator is above the zero line and poised for an upside crossover and new outright buy signal.
In this daily Point and Figure chart of ALKS, below, I can see a potential upside price target in the $47 area. A trade at $34 is needed to refresh the uptrend.
In this weekly Point and Figure chart of ALKS, below, I can see the same $47 price target and the same key breakout level at $34.
Bottom-line strategy: Traders should wait for ALKS to make its move to the upside. Wait for a trade at $34 or higher before going long. Risk to $30. The $47 area is my price target for now.
