Nuance Communications Inc. (NUAN) was upgraded to a Buy by TheStreet's quantitative service. Regular readers of "Kamich's Korner" know that I often use the quantitative service to look for new investment ideas. Let's check out the charts and indicators of NUAN to see if they too are bullish.
In this daily bar chart of NUAN, below, we can see that prices broke out from a long sideways consolidation pattern in late October. Prices stayed roughly in a $13 to $15.50 range from February. Prices moved back and forth around the 50-day and 200-day moving average line, but in early October prices began to rally above both of these indicators. The daily On-Balance-Volume (OBV) line made a low in late June and has risen to a new (bullish) high the past five months. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish configuration above the zero-line.
Bottom-line strategy: Big bases or long bases can produce big rallies, so I am very interested in NUAN. The big base on the second weekly bar chart and the quantitative upgrade to buy suggest that NUAN is ready for a big move up. Traders and investors could go long at current levels risking a close below $16 for now.