Logistics and trucking company J.B. Hunt (JBHT) had a sharp downward price adjustment from the middle of March into April but now prices have stabilized and a sell-side firm rated the shares a new buy with a $215 price target. Let's check out the charts and indicators to see if the charts concur.
In this daily bar chart of JBHT, below, we can see that prices have been "chopping" sideways to higher the past six weeks. Prices could have launched a new leg lower but instead prices have firmed slightly. Trading volume has declined the past six weeks. The lagging 50-day moving average has a negative slope while the 200-day moving average is close to cresting.
The On-Balance-Volume (OBV) line has weakened since December and does not confirm the modest price increase. The Moving Average Convergence Divergence (MACD) oscillator gave a cover shorts buy signal in April and continues to move upwards towards the zero line.
In this weekly Japanese candlestick chart of JBHT, below, we see a mixed picture. Prices are trading below the cresting 40-week moving average line. The pattern in the past two months looks like a bear flag formation but it has not broken to the downside to resume the decline. When a price pattern does not act the way we anticipate it is a sign that prices could go in the other direction.
The weekly OBV line shows a bounce from April to May so we may be seeing a return of more aggressive buying. The MACD oscillator has begun to narrow and that is a step in the right direction.
In this daily Point and Figure chart of JBHT, below, we can see a potential upside price target in the $198 area.
In this weekly Point and Figure chart of JBHT, below, we can see a $203 price target.
Bottom line strategy: Traders could go long JBHT at current levels risking to $165. The $198 to $203 area is our price target for this short-term trade.
