Novartis Is Moving Higher on the Charts, Go Long or Add to Longs

Let's check in on this Swiss-based pharmaceutical giant.

During the 'Lightning Round' segment of the Mad Money program Tuesday night, Jim Cramer said he favored Novartis AG (NVS) more than another drug company that a caller asked about.

In this daily bar chart of Action Alerts PLUS holding NVS, below, we can see that prices have been in an uptrend since late December. NVS tested the rising 200-day moving average line in April and again in early October. NVS is above both the 50-day and 200-day lines and both averages have positive slopes.

The daily On-Balance-Volume (OBV) line has made a new high for the move up this month which is well ahead of the price action.

The Moving Average Convergence Divergence (MACD) oscillator crossed to the upside in early October for a cover shorts buy signal and it crossed above the zero line earlier this month for an outright go long signal. 

 

In this weekly bar chart of NVS, below, we can see that prices have trended higher the past three years. NVS is above the rising 40-week moving average line.

 

The weekly OBV line has been strong and is at a new or soon will be at a new high. The MACD oscillator is curving upwards towards a new outright go long signal.  

 

 

 

In this Point and Figure chart of NVS, below, we can see that a downside price target of $79 is being projected, but a trade at $92 should turn the chart bullish and generate an upside price target. $92 is not far away.  

 

 

Bottom line strategy: Risking a close below $87, traders could long NVS and or add to longs at current levels. 

 

(Novartis is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells NVS? Learn more now.)

Employees of TheStreet are prohibited from trading individual securities.

Action Alerts PLUS, which Cramer manages as a charitable trust, is long NVS.