Shares of toy maker Mattel (MAT) are moving higher Thursday as one sell-side firm expects the company to exceed its financial guidance. Last month when we reviewed the charts of MAT we did not find them compelling, writing, "I don't believe in Santa Claus but, the CFO and CEO may want to shoot an email to the North Pole. Meanwhile, I do not find the charts of MAT attractive."
Now I find that the picture has improved. Let's check again.
In this daily bar chart of MAT, below, prices were weak in December but managed to stabilize and turn up again into January. MAT basically corrected half of its November-December advance. Looking at the whole pattern from March as a long consolidation pattern, I would now view the December pullback as a last dip before springing to the upside. The moving averages have positive slopes.
The daily On-Balance-Volume (OBV) line has been trending higher from early October and hardly dipped in the first half of December. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line.
In this weekly Japanese candlestick chart of MAT, below, we see a mixed picture but not a bearish one. Prices are in a consolidation pattern after a rally. MAT is trading above a flat 40-week moving average line. The weekly OBV line has held a positive trend since early 2020. The MACD oscillator looks close to a new buy signal.
In this daily Point and Figure chart of MAT, below, we can see a potential upside price target in the $33 area. A trade at $24 will refresh the uptrend.
In this weekly Point and Figure chart of MAT, below, we used close only price data. Here we can see a $51 price objective.
Bottom line strategy: The charts of MAT have swung from bullish to bearish and back again. Traders could go long MAT on strength above $23.50 or above $24. The $33 area is our first price target. Risk to $19 for now.
