Hologic (HOLX) is a developer, manufacturer and supplier of diagnostics products, medical imaging systems, and surgical products focused on women's health.
The stock of Hologic was downgraded from "buy" to "hold" by Evercore on Monday. Let's check out the charts. In our February 4 review of HOLX we wrote that "The charts of HOLX are still pointed up. Sticking to my late December recommendation, I would wait for a downward reaction over the next several weeks to buy; the trigger could be rising interest rates or the stronger dollar or something entirely different."
Let's check the charts again.
In this daily bar chart of HOLX, below, we can see that prices dipped after our February 4th review allowing buyers to acquire shares at a better price. Prices subsequently rallied but ran into some selling interest (resistance) in the $76-$78 area - the zone where prices stalled in December. HOLX is trading above the rising 50-day moving average line and above the rising 200-day line.
The On-Balance-Volume (OBV) line shows a rise the past two months. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but has narrowed in recent days.
In this weekly Japanese candlestick chart of HOLX, below, we see a mixed picture. Prices have made a sideways consolidation in the form of a triangle. Prices look like they had turned upwards to break out of the pattern but the advance appears to have stalled with a spinning top formation. Prices are not far above the rising 40-week moving average line.
The weekly OBV line shows a decline to early March with recent improvement. The MACD oscillator looks like it has turned upward just slightly above the zero line.
In this daily Point and Figure chart of HOLX, below, we can see a potential upside price target in the $89 area. A trade at $79 is needed to refresh the uptrend.
In this weekly Point and Figure chart of HOLX, below, we can see a price target in the $96 area.
Bottom line strategy: For now it looks like HOLX will try to move higher. Risk to $71 and add to longs or go long on strength above $79.
