Masco Inc. (MAS) was upgraded to a Buy today by TheStreet's quantitative service. Masco is big in products for the home improvement and new home construction markets. Let's check out the charts and indicators to see if this quantitative upgrade is supported by the trends.
In this daily bar chart of MAS, below, we can see a decline from around $43 back in last February to the $27 area in October and December. The two lows around $27 are interesting. The volume of trading was heavier in late October at the first low than the retest and second low in late December. MAS rallied in early January to close above the 50-day moving average line which now sports a positive slope. MAS is testing the declining 200-day moving average line and could even close above it today. The daily On-Balance-Volume (OBV) line has stabilized the past three months and has begun to turn higher signaling that buyers of MAS have turned more aggressive. The Moving Average Convergence Divergence (MACD) oscillator made a much higher low in late December than the October low. In January the MACD oscillator crossed the zero line for an outright go long message.
In this weekly bar chart of MAS, below, we are starting to see some green shoots. Prices are below the 40-week moving average line but the slope of the line is starting to bottom. The weekly OBV line shows a decline from early in 2018 but it has stabilized the past two months. The weekly MACD oscillator has crossed to the upside from below the zero line. This is a cover shorts buy signal.
In this Point and Figure chart of MAS, below, we can see the recent price strength (look for the "2" on the chart) and an upside price target of $39.80.
Bottom line strategy: MAS might pullback to fill today's price gap. Aggressive traders could use that pullback/retracement to probe the long side risking a close below $31.50 looking for gains to the $40 area.
