Pharmaceutical giant GSK plc (GSK) announced Friday that they had settled a cancer lawsuit in California over their Zantac product that was due to go to trial. The stock is trading higher and the charts are looking a little more promising, so let's give it a look.
In the daily bar chart of GSK, below, I can see that share prices gapped above the 50-day moving average line Friday but more interesting is that the stock is trading above the bottoming 200-day line.
The On-Balance-Volume (OBV) line made a low back in September. The Moving Average Convergence Divergence (MACD) oscillator is just slightly below the zero line.
In the weekly Japanese candlestick chart of GSK, below, I can see a bullish reversal pattern in late May. The shares now trade above the bottoming 40-week moving average line. Prices have been finding support in the $34-$33 area for several months now.
The OBV line made its low in September. The MACD oscillator is moving around the zero line and is close to an outright buy signal.
In this daily Point and Figure chart of GSK, below, I can see that the software is projecting a downside price target for GSK. A trade at $37.11 could turn this chart bullish.
In this weekly Point and Figure chart of GSK, below, I can see the same downside price target as the daily chart -- $31.
Bottom-line strategy: I am not 100% sure that GSK has turned the corner so traders should only buy strength in GSK. Go long on strength above the $37.11-$38 area.
