Professional services firm Marsh & McLennan (MMC) broke out to new highs in late April and May but has pulled back in recent days. Is this a "bull trap" or just a retest of the top end of a large continuation pattern? In other words, do we want to be a seller or a buyer?
Let's check.
In this daily bar chart of MMC, below, I can see that prices are pulling back towards the highs of December-January-February. Trading volume did increase in late April when prices pushed up to new highs. Interpretation of volume trends is kind of subjective at times. Was this "liftoff" volume or not? I think not and that is okay.
A low volume breakout can be followed by a quick retest/shakeout move before the real uptrend gets going. Prices are testing the rising 50-day moving average line. The daily On-Balance-Volume (OBV) line has hardly moved lower and the Moving Average Convergence Divergence (MACD) is still above the zero line.
In this weekly Japanese candlestick chart of MMC, below, I can see several highs in the $175 area going back to late 2021. The 40-week moving average line is positive. The weekly OBV line has been steady from early 2022. The MACD oscillator is above the zero line.
In this daily Point and Figure chart of MMC, below, I can see the recent pullback/correction. I can also see an upside price target in the $243 area.
In this weekly Point and Figure chart of MMC, below, I can see the same $243 price target as the daily chart above.
Bottom line strategy: Aggressive traders could go long MMC on strength above $175. Risk to $170. The $243 area is my price target for now.
