In our last review of Mastercard (MA) we were seeing some positive clues on December 3 and wrote that "MA has 'rolled over' but its downside momentum is slowing so we are split in our forecast. The trend is still down but improving momentum and a possible broadening pattern suggest we may be starting a new base pattern. Let's keep an open mind and stay flexible."
Today we can see, chart below, that shares of MA are up sharply and heading towards its early January high. A break above the January high will give us the simple definition of an uptrend - a higher low and a higher high starting with early the December low and the late January higher low. Prices are trading above both the 50-day and 200-day moving average line.
The On-Balance-Volume (OBV) line has been steady since an early December low. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line and could turn upwards soon for a new buy signal.
In this weekly Japanese candlestick chart of MA, below, we can see some improvement. Prices below $345 are being rejected with the lower shadow on the most recent candle. While the longer-term trend of the weekly OBV line is pointed down, we have not made a new low since early December. The weekly MACD oscillator is pointed up and close to crossing above the zero line for a new outright buy signal.
In this daily Point and Figure chart of MA, below, we can see that the software is showing a potential downside price target of $282. A rally to $384.57 may be needed to turn this chart bullish.
In this weekly Point and Figure chart of MA, below, we used close only price data. Here the chart has been "manipulated" a bit to show us an upside price target of $461.
Bottom line strategy: Market forecasts can change day by day and lately minute by minute. At this point in time on Friday it looks like the board market averages and MA are going to rally into February. MA is set up to break above its early January highs. A trade at $384.57 or higher should precipitate further gains. Experienced traders could go long MA risking below $350.
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